The workplace:
Labor Committee proposals would have hiked business costs

(June 26, 2007) Scores of harmful labor and employment proposals this year could have had a devastating impact on the cost of doing business in Connecticut — if they had been enacted. Fortunately, very few of these were approved, and none of the approved measures will likely have a significant impact on businesses.

Workers’ compensation
For years the Labor Committee, supported by organized labor and trial attorneys, has tried to repeal the landmark reforms of Connecticut’s workers’ compensation system.

Businesses and lawmakers worked together to forge the reforms that tamed skyrocketing costs, improved the workers’ comp system, and balanced the needs of employees and employers. They also helped make Connecticut’s workers’ compensation system a model in the United States.

Yet the committee again tried to repeal key reforms and impose new costs and administrative burdens. Two failed bills in particular, SB-153 and SB-847, would have been very harmful.

SB-153 would have greatly expanded benefits for scarring, causing workers’ comp costs in Connecticut to increase by $40 million in the first year alone, based on a similar bill last year that was priced by the National Council on Compensation Insurance (NCCI).

SB-847 would have greatly expanded the state’s unique discretionary benefit that injured workers may receive in addition to weekly wage replacement, partial disability and other benefits. This could have led to a more than 50% increase in workers’ comp costs, according to NCCI.

Repealing these successful reforms would only weaken the state’s business climate and bring back some perilous days for Connecticut’s economy.

Captive audience
So-called “captive audience” bills, SB-602 and HB-7326, part of a nationwide campaign to boost union membership, would have prohibited employers from communicating freely with their employees in mandatory staff meetings.

SB-602, for health care entities, and HB-7326, for all employers, essentially made “political matters” off limits as a major topic at mandatory employee meetings. But “political” was so broadly defined that almost any topic could be forbidden. 

Federal law already safeguards the rights of employers and employees alike. HB-7326 would have upset that balance in favor of labor organizations and to the harm of employers. It was approved by the Judiciary and Appropriations committees, signaling an increasing ambivalence toward employers’ need to manage their businesses effectively.

Noncompete agreements
HB-6989 (Public Act 07-237), which passed, will prohibit employers from using noncompete agreements to prevent certain employees from taking the same, or similar, job for a different employer in the area.
Originally, the bill would have restricted the use of noncompete agreements for all employees. Ultimately narrowed, the bill still jeopardizes the time and investment employers make in providing employees with unique training or skills, developing products, or in building customer bases. As approved, it applies only to certain security guards and broadcasters.

Workplace health and safety
Under SB-371, which did not pass, employers would have had to police — and be accountable for — employees’ workplace “bullying” actions.

“Bullying” was broadly defined as any conduct that an employee might find offensive, humiliating, threatening or intimidating — a tremendously subjective standard. Fortunately, legislators understood the problems it would have caused and stopped it after the Labor Committee’s approval.

HB-7035, which also failed, would have given the complex task of writing ergonomics policies to employee health and safety committees — at great expense to employers for additional training. Furthermore, there were concerns that it also would have disadvantaged employees, whose well-being would depend on co-workers who lacked proper expertise.

Employee benefits
Other bills attempted to further regulate and micromanage how companies award fringe benefits to their employees, but ultimately failed in the session. HB-7317 prohibited a “use it or lose it” system for employees’ paid vacation time. Employers would either have had to allow the unused vacation time to be carried over for an additional calendar year or pay employees a lump sum for the unused vacation time.
SB-601 required employers to provide paid sick leave to all hourly and non-exempt employees in increments of one hour for every 40 hours, with unlimited and indefinite carryover. This mandate would have pushed employee benefit costs that are already nearly unaffordable even higher.

SB-1081 would have required all private employers in the state to pay their employees at least on a biweekly basis regardless of an employer’s existing needs, resources or compensation structure. For Connecticut’s many multi-national companies with thousands of employees worldwide, having to comply with different payroll mandates in each location would have led to major administrative costs.

Just considering these bills sent a negative message to the state’s business community. For more information, contact CBIA’s Kia Floyd at 860-244-1931 or floydk@cbia.com.

CBIA Action Center

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