New Workplace Mandates, Unemployment Compensation Reforms Approved
A legislative committee this week approved broad new mandates on Connecticut employers, including paid family and medical leave and a massive expansion of the state’s paid sick leave statute.
The Labor and Public Employees Committee also unanimously passed long-overdue reforms to the state’s unemployment compensation system, although that bill faces significant challenges as it moves to the full General Assembly.
SB 1 and HB 5387: These identical bills establish a costly and unsustainable paid FMLA mandate that applies to businesses with as few as two employees.
The benefit is funded by deductions from employee wages, but businesses are required to continue paying nonwage benefits during leave periods.
An analysis of a similar proposal rejected last year revealed paid FMLA requires at least 120 new state employees and would cost Connecticut taxpayers $13.6 million to implement and $18.6 million in annual administrative costs.
The committee this year inserted a section calling for $20 million in bonding to launch the program, sticking taxpayers with the implementation costs and adding to the state’s ever-growing debt obligations.
These bills also allow the use of paid FMLA to care not only for extended family members—including siblings, grandparents, and grandchildren—but also “anyone whose close association with the employee is equivalent to that of a family member.”
State and local governments are exempt from both paid FMLA measures.
Sick Leave Expansion
HB 5044 represents a major expansion of the state’s paid sick leave law.
In 2011, Connecticut became the first state in the country to adopt paid sick leave, mandating that certain non-manufacturing companies with 50 or more employees provide each service worker with up to five days annual leave to care for their own or a child’s illness.
This bill expands the paid leave mandate to all businesses—including non-profit organizations—with 20 or more employees and requires all companies with less than 20 workers to provide unpaid leave.
HB 5044 expands the paid leave mandate to all businesses—including non-profit organizations—with 20 or more employees.
Expanding the mandate represents significant additional costs to every Connecticut business, and it's certainly not the right prescription as the state's economy and job growth continue to trail the region and the country.
Sexual Harassment Prevention Training
The committee also approved HB 5043, which requires businesses with 15 or more employees to provide sexual harassment training to every employee at least once every five years.
Employers with less than 15 employees must distribute annual notices about sexual harassment laws.
While CBIA encourages businesses to provide sexual harassment training to all employees, mandating this requirement means the state's employers face staggering costs should the bill become law.
Current state law requires training for supervisors at companies with 50 or more employees within six months of hire or promotion.
Costs associated with training supervisors in Connecticut range between $100 and $150 per employee.
HB 5043 expands that training mandate to more than one million workers, with private sector costs potentially exceeding $100 million every five years.
Unemployment Reform Moves Forward
Finally, a bill that is good for employees and employers made its way out of the committee—although it appears to be on life support.
HB 5480 makes four long-overdue reforms to the state's unemployment compensation benefit system, restoring the solvency of the Unemployment Trust Fund at no cost to the state. The bill:
- Requires employees to earn at least $2,000 a year to qualify for unemployment benefits. (The current threshold, $600 a year, hasn't changed in 50 years.)
- Freezes the maximum unemployment benefit rate until the unemployment trust fund is 70% solvent.
- Prohibits workers from collecting unemployment benefits until they have exhausted severance pay.
- Redefines "an instance of unexcused absence" to mean one day of no-call, no-show, not one or two consecutive days, as current law state.
While the committee has wrapped up its work for the session, Connecticut businesses have a lot to be concerned about.
Some lawmakers and the state Department of Department argue that these reforms balance the fund on the backs of workers—and that a tax increase on employers must accompany any reforms.
But Connecticut businesses maintain that for years they have paid higher unemployment taxes than surrounding states—yet our failure to adopt reforms, as neighboring states have done, prevents the fund from reaching solvency.
Connecticut pays some of the highest unemployment benefits in the country. None of HB 5480's reforms decrease those benefits; in fact, they maintain benefits for full-time workers who lose a job through no fault of their own.
So, while the Labor Committee has wrapped up its work, Connecticut's business community has a lot to do—and be concerned about—for the rest of the legislative session.
For more information, contact CBIA's Eric Gjede (840.480.1784) | @egjede
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