Striking Workers Unemployment Bill: Tax Hikes ‘Likely’

Controversial bills allowing striking workers to claim unemployment benefits drew widespread opposition at a legislative public hearing this week.

The Labor and Public Employees Committee heard testimony on two proposals that make unprecedented—and costly—changes to current state law.

SB 8, a priority for Senate Democrats, and HB 6904 are revivals of failed legislation from previous legislative sessions.

Both measures grant unemployment benefits to striking workers after 14 days of a labor dispute.

Gov. Ned Lamont vetoed legislation last year that created a $3 million, taxpayer-funded “Connecticut families and workers account” administered by the state Comptroller.

Unintended Consequences

Numerous employers and business groups testified against the bills at the Labor Committee’s Feb. 13 hearing.

“Connecticut employers fund the UI Trust Fund and it wasn’t long ago we saw an increase in our UI taxes after the state borrowed more than $1 billion from the federal government during the pandemic,” Allnex USA site manager Frank DiCristina told committee members.

“We are now at risk of seeing an unprecedented increase in UI taxes.”

Allnex USA’s Frank DiCristina

“We are now at risk of seeing an unprecedented increase in UI taxes, as well as the unintended consequences of incentivizing people to go on strike, as opposed to settling a labor dispute fairly and in a timely manner.”

O&G Industries vice president T.J. Oneglia said the proposals “erode and undermine the predicate of good faith collective bargaining that has been the bedrock of labor relations for decades.”

“The state, labor unions, and private companies like O&G Industries should all have something to lose in the event that they cannot resolve their bargaining differences through traditional labor negotiations.”

Unemployment Taxes

Workers’ Compensation Trust president and CEO Diane Ritucci testified that legislation “will cause unemployment taxes to skyrocket for businesses, regardless of whether or not employees choose to go on strike.”

“These bills will inevitably increase costs for employers throughout the state. The possibility of all employers having to provide unemployment benefits for striking workers would put the state ’s UI Trust Fund at risk of insolvency.”

“Connecticut is already expensive to be in and this just makes it even harder to stay.”

Acme Monaco’s Rebecca Karabin-Ahern

Bruce Stovall, a vice president with the nonprofit services provider Oak Hill, said the organization “would prefer funding and support for our unionized workers to go towards a fair, livable, wage.”

“This would better assist the nonprofits to attract and retain the vital and valued employees we need to deliver our services,” he said.

Acme Monaco co-president Rebecca Karabin-Ahern added that “Connecticut is already expensive to be in and this just makes it even harder to stay.”

‘Hinder Growth’

Small business owner Frank told committee members that “small businesses, which often operate with limited margins, could be disproportionately affected by any resulting increases in UI taxes or assessments.”

“This could lead to financial strain on small businesses, potentially resulting in reduced hiring or even business closures,” he said.

Greater New Haven and Quinnipiac Chambers of Commerce president Garrett Sheehan testified that “with many employers already struggling with the cost of doing business, these bills would further hinder economic growth and job creation.”

“These bills would further hinder economic growth and job creation.”

GNHCC’s Garrett Sheehan

CBIA’s Paul Amarone told the committee that the state’s Unemployment Trust Fund currently has outstanding federal loans that must be paid off to avoid “significant” federal unemployment tax hikes on employers.

He noted that the state can request a waiver of a portion of any tax increase “as long as the state takes no legislative, administrative or judicial action” to reduce the solvency of the UI trust fund.”

“This is the exact kind of legislative action that could reduce the solvency of the trust fund, which would once again put employers on the hook for increased unemployment insurance taxes,” he said.

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For more information, contact CBIA’s Paul Amarone (860.244.1978).