Legislature aiming to increase workers’ comp costs

(Feb. 22, 2008) The legislature’s Labor Committee has proposed many measures that would significantly increase business costs, repeal key reforms of the workers’ compensation system, and make Connecticut a much less attractive place in which to do business.

In meetings with municipal and business leaders across the state, both groups have continually expressed concern to CBIA that lawmakers avoid doing anything to increase their already high costs and administrative burdens or make it harder for them to comply with laws and regulations.

Nevertheless, here is a review of some of the measures proposed in the Labor Committee that would, in fact, have a negative effect on businesses and municipalities.

Workers’ compensation
Benefit expansions:
SB-255 expands workers’ compensation discretionary benefits. It was estimated by National Council on Compensation Insurance (NCCI) that a similar measure last year would have increased workers’ compensation costs for the average employer in Connecticut by more than 50%.
SB-63 expands workers’ comp benefits to include post traumatic stress disorders with no associated physical injury.
SB-64 expands workers’ comp benefits for scarring to include scars occurring anywhere on the body – even if they don’t affect the employee’s earning capacity.

Increased administrative burdens: SB-57 increases employers’ burdens for managing workers’ compensation by imposing new administrative responsibilities.

Increased penalties on employers: HB-5334 penalizes employers for trying to manage workers’ comp claims properly.

Other proposals
The Labor Committee is also moving forward many other measures of concern to the business community. These include proposals dealing with:

Penalties for retirement plan adjustments: SB-58 eliminates state assistance — loans, grants, guarantees and tax credits — to companies doing business with the state that reduce employee retirement benefits during their contract. This measure disregards the fact that companies often make financial decisions that directly or indirectly affect employee retirement benefits — the same way consumers periodically adjust their own retirement accounts. Penalizing corporate investment and other such decisions will discourage companies from seeking to do business with the state.

Workplace bullying: SB-60 broadly defines“bullying” in the workplace to include any behavior an employee might find offensive; and substantially increases employer liability for those actions. This measure opens the door wide to frivolous complaints and significantly higher workplace costs for employers.

Paid time off mandate: SB-217 requires employers of 25 or more employees to provide their employees with a minimum of one hour of paid time off for every 40 hours worked for illness, domestic violence treatment and other associated reasons. It also allows employees to carry over accrued paid sick leave indefinitely from year to year.

Minimum wage hike: HB-5105 increases the minimum wage to $8 per hour from the current $7.65 per hour which took effect last year. Under state law, Connecticut’s minimum wage — already sixth-highest in the U.S. — is indexed to stay above the federal minimum wage.

Electronic pay restriction: HB-5114 restricts employers from issuing employee pay checks electronically in certain cases.

Unemployment comp
The committee is also looking at a positive unemployment compensation measure. HB-5482 modernizes unemployment compensation eligibility standards by switching from a monetary threshold to time worked.

For more information, contact CBIA’s Kia Murrell at 860-244-1931 or kia.murrell@cbia.com.