Small Business Costs Hiked as Paid Sick Leave Clears Senate
Connecticut small businesses face higher operating costs beginning next year after the Senate approved a sweeping expansion of the state’s paid sick leave mandate May 6.
HB 5005 passed on a 23-12 party line vote, with one Democrat—Sen. Joan Hartley (D-Waterbury)—not voting.
The bill cleared the House last month and now heads to Gov. Ned Lamont’s desk. The governor has said he will sign the legislation.
One of four paid sick leave measures introduced this legislative session, HB 5005 mandates that all Connecticut employers provide up to 40 hours of annual leave.
Current law, which took effect in 2011 and was the first such mandate in the country, requires that businesses with 50 or more employees in designated service occupations provide paid sick leave.
Staged Implementation
Introduced as a study bill, HB 5005 was amended in the legislature’s Labor and Public Employees Committee to incorporate language from another proposal, HB 5166.
The legislation stages implementation of the leave mandate based on the size of the employer:
- Jan. 1, 2025 for employers with 25 or more employees
- Jan. 1, 2026, for employers with 11 or more employees
- Jan. 1, 2027, for employers with one or more employees
It exempts seasonal workers, those who work less than 120 days per year, and members of construction-related trade union organizations that are parties to multiemployer health plan arrangements.
Section 3 of the bill also exempts self-employed individuals, while section 4 exempts employees covered by collectively bargained family care and personal care agreements.
Companies that already offer at least 40 hours of paid time off per year in the form of vacation, personal time, or other leave are considered to be in compliance and not required to offer additional leave.
No Documentation
Employees will accrue one hour of paid time off for every 30 hours worked, capped at 40 hours leave annually.
During the more than seven-hour Senate debate, Sen. Julie Kushner (D-Danbury), co-chair of the Labor Committee and one of the bill’s chief advocates, acknowledged that employees can take leave for any reason.
“There will be no required documentation and no advance notice to use the sick leave provided in this bill,” Kushner said.
Employees begin accruing time off on their first day of work, although they cannot take leave, which can be used in any increment of their choosing, until the 120th calendar day of employment.
If an employee is terminated and rehired at a later date, they are not eligible to use any unused benefits, with the accrual reset.
Nothing in the bill requires an employer from paying out any unused sick time unless it is in their employee handbook.
The bill allows employees to carry over up to 40 hours of unused sick time from the prior year, but annual paid leave is capped at 40 hours, regardless of how many hours are carried over.
The bill also requires employers to retain records for three years of the accrual and usage of paid sick time.
‘Tone Deaf’
Senate Republican Leader Sen. Stephen Harding (R-Brookfield) called the bill “one of the most irresponsible pieces of legislation we have ever seen passed by majority Democrats.”
“This is completely tone deaf,” he said. “Rather than nurturing our small mom and pop businesses, this onerous mandate does just the opposite.
“This is Big Government forcing the engines of our economy to comply. Every Democrat who voted ‘yes’ has just added to our state’s reputation of being a bad state for business.”
“Rather than nurturing our small mom and pop businesses, this onerous mandate does just the opposite.”
Sen. Stephen Harding
Sen. Ryan Fazio (R-Greenwich) noted that Connecticut was already one of the costliest states in the country to run a business.
“My friends, we’ve see this movie before. It doesn’t end well,” he said during the floor debate.
“It results in lower job creation, lower wages, less prosperity for the working class and middle class, less opportunity for people who need it, and less success for small businesses and Connecticut’s economy.”
One-Size-Fits-All
CBIA strongly opposed HB 5005, noting its negative impact on small businesses given the onerous one-size-fits-all approach.
CBIA president and CEO Chris DiPentima called the bill “yet another unfortunate example of policymakers making it more burdensome for small businesses to operate in Connecticut.”
CBIA’s Chris DiPentima called the bill “yet another unfortunate example of policymakers making it more burdensome for small businesses.”
“For a long time we really honored and protected those small businesses, those micro-businesses with less than 15 employees, less than 25 employees,” he said.
“This continues a discouraging trend over recent legislative sessions with a series of costly mandates that disproportionately target small businesses, the heartbeat of our economy.
“Businesses now unfortunately have to have their head on a swivel because there are more laws being passed that impact them in a negative way.”
For more information, contact CBIA’s Ashley Zane (860.244.1169) | @AshleyZane9.
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CBIA IS FIGHTING TO MAKE CONNECTICUT A TOP STATE FOR BUSINESS, JOBS, AND ECONOMIC GROWTH. A BETTER BUSINESS CLIMATE MEANS A BRIGHTER FUTURE FOR EVERYONE.