2016 Labor Preview: Mandate Proponents Ignore Jobs Impact
State lawmakers who have said, “We’re proud to be the first in the nation to enact …” [fill in the blank with a new government mandate on employers] should read a recent news column that reveals another side of the story.
Owners of a 101-year-old Connecticut manufacturing company wrote “Goodbye Connecticut: It’s Just Too Expensive Here,” in the Journal Inquirer, to explain why they’re moving their Torrington facility and jobs to another state.
Among the reasons they cite is that “year after year, employers like us have to fight off efforts to: expand state requirements for paid sick leave, increase the highest minimum wage in the nation to $15 per hour and more, require paid family and medical leave, impose unworkable restrictions on workforce scheduling…”.
All of those are proposals have either been promoted or approved by the legislature’s Labor Committee, and some lawmakers are already discussing bringing some of the proposals back in 2016.
The manufacturer’s story confirms that anti-business proposals repeatedly considered, even if they fail, negatively impact Connecticut’s competitiveness–as well as national business rankings.
For example, CNBC, in its latest annual “America’s Top States for Business” study, placed Connecticut 47th in the U.S. for business costs.
Here is a closer look at each of these mandates.
Paid Sick Leave Expansion
Connecticut became the first state to enact a paid sick leave mandate, which took effect in 2012. Lawmakers insisted the law would reduce incidences of workplace illness and turnover in personnel, and that it wouldn’t be costly for businesses to implement.
But studies conducted by those who support the law say Connecticut’s paid sick leave has resulted in no reduction in workplace sickness or turnover.
What’s more, businesses that offered their own paid sick leave policy before the law passed are incurring additional costs to comply with the new state mandate.
In 2015, the Labor Committee aimed to dramatically expand the paid sick leave mandate and force even the state’s smallest businesses to participate. It seems likely supporters will again push to double down on this failed policy in 2016.
Repeated consideration of anti-business proposals, even if they fail, negatively impacts Connecticut’s economic competitiveness.
For the last three years, various committee proposals have started with the premise that certain businesses (with 250 or with 500 employees depending on the bill) who pay starting wages of less than $15 per hour are “low wage employers.”
Some lawmakers want those employers to pay a new state tax of $1 per hour worked by any employee making less than $15 per hour. Their rationale is the misguided belief that any person making less than that is a recipient of expensive state services.
Of course, the employees wouldn’t see any benefit from the tax—the state would take the extra dollars to help balance the state budget. So while these proposals would lead to fewer hours for employees, one lawmaker said, "this is very attractive income for the state.”
Paid Family and Medical Leave
The committee also has been pushing paid family and medical leave, and the 2015 version of the proposal would have allowed employees of any size company to take off up to six weeks of paid leave, at 100% of pay.
Workers would have seen their paychecks reduced each pay period to pay for the benefit, with employers having to transfer the dollars over to the state to hold for the potential leave.
Proponents said that the new paid leave would not cost employers--ignoring the added administrative costs of making payroll deductions, and the overall tax increases resulting from the hundreds of new state employees who would be needed to administer the program in Hartford.
The proposal died this year, but Democratic legislative leaders approved $140,000 for the Labor Department to develop the program. More legislation will be needed in 2016 to fully implement it.
First Isn't Always Best
Lawmakers should understand that businesses want Connecticut to be a great place to do business and an easier place for people to find good-paying jobs.
But it won't happen if businesses are weary from battling ill-conceived legislation.
It’s time to improve Connecticut’s competitiveness and national rankings, and stop being the first in the nation to pass new workplace mandates until we’re first in the nation in job growth.
For more information, email or call CBIA’s Eric Gjede (860.244.1931) | @egjede
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