It was discouraging but not entirely surprising that the 2015 session was another difficult year for Connecticut employers in workplace-related legislation.

While most of the Labor Committee's least business-friendly proposals were stopped, the fact that they were brought out for discussion puts one more arrow in the quiver of those that claim Connecticut is hostile toward employers.

Probably the biggest missed opportunity this year was how the committee disregarded any attempt to reform the state's unemployment compensation system—which is still underwater from the Great Recession. Several solid reforms were proposed but ignored.

Unemployment comp reforms

Employers in Connecticut have the highest unemployment compensation taxes in the nation, with businesses here paying an average of four times more in federal unemployment tax than their counterparts in Massachusetts.

The problem stems from our state’s historic refusal to make the same benefit changes that other states have made to promote the fund’s solvency for future workers.

In fact, House Democratic members of the Labor Committee, with some assist from the state Department of Labor, have refused to make any changes to unemployment compensation benefits.

These lawmakers are worried about the politics of benefit reform, while the state Labor Department has flatly refused to adopt any benefit reform unless accompanied by massive unemployment tax increases. In fact, the DOL submitted testimony in opposition to every unemployment bill that modified benefits to promote long-term solvency. Both groups continue to fiddle while the trust fund burns in the red.

The business community suggested, in HB 5851, five unemployment reforms that many other states are already using. But the bill was given an off-site public hearing and quickly ignored by the committee.

While lawmakers backed away from making those much-needed improvements, they weren’t shy about trying to exert more government control over the workplace.  In a few cases, they succeeded.

Here is a review of the most significant legislative labor proposals this year.

New mandates

Several major efforts were made to increase workplace costs and government oversight.

Had it not been stopped, HB 6932 would have created a program requiring employees to pay into a system allowing them up to 12 weeks per year of paid leave (at 100% of their pay up to $1,000 per week).

It also required businesses to continue to provide those employees with non-wage benefits and obligated state taxpayers to fund the program’s administration.

One lawmaker claimed the program wouldn't have cost the state any money and could have been funded by as little as 0.25% of 1% of every employee's paycheck.

This would have meant an employee making $52,000 a year would only have had to pay $130 into the system each year to be able to draw out $12,000.

The fuzzy math also ignored the cost to hire state employees to administer the program.  A similar program in Washington state was projected to cost nearly $235 million per biennium.

The Labor Committee also considered HB 6784, which would have massively expanded the state's paid sick leave mandate by:

  • Applying it to nonmanufacturing businesses with 10 or more employees (currently it applies to 50 or more employees).
  • Extending it to all hourly workers instead of the current list of specific job titles
  • Allowing for the accumulation of two more paid sick leave days
  • Making employees eligible for the benefit earlier than in the current law

However, this bill had so little support it was unable to make it out of the Labor Committee.

The committee also raised HB 6933, which would have required employers to post employee schedules at least 21 days in advance. Any changes to that schedule would have taxed an employer "predictability pay" to employees.  This bill also died in the Labor Committee.

Intrusive 

One intrusive bill that did pass and will become law on July 1 is HB 6850. It prohibits employers from forbidding employees to discuss or distribute another employee's confidential wage information without consent if that employee has previously disclosed his or her wage information.

While the bill is plagued by many legal ambiguities, it’s clear is that it will result in workplace disruptions and disputes that the employer will be unable to help resolve without the threat of possible civil action.

Failed workplace-related legislation:

  • HB 6875 would have blocked employers from asking prospective employees to submit to criminal background check until after they have been offered the job. It also prevented employees from having to disclose convictions for "nonviolent misdemeanors that are more than five years old.”
  • HB 6789 would have taken away many employers’ right to conduct credit history checks on employees unless the employee had access to a museum or library collection, or prescription drugs.
  • SB 106 would have created a "guilty-until-you-prove yourself innocent" presumption that employers taking any immigration-related action against an employee within 90 days of that employee exercising any labor right did so out of retaliation.

Wage and hour issues

Unfortunately for employers, SB 914 passed and likely will pressure businesses to settle legitimate wage disputes. That’s because it takes away a judge’s discretion to award anything less than double damages in a civil action for the recovery of unpaid regular and overtime wages.

Two failed bills were attempts to raise the minimum wage to $15 in certain businesses. Companies with 500 employees (SB 1044) and 250 employees (HB 6791), as well as franchisors whose local franchisees collectively have that many employees, would have had to pay a tax of $1 per hour worked by any employee that is paid less than $15 per hour.

This punitive tax would have hit both small and large employers because most franchise agreements require the locally owned franchisee to pay all local taxes. Apparently, these bills were being considered for inclusion in the budget and tax package right up until the session’s very last minute.

Other failed wage proposals:

  • HB 6705 would have mandated businesses receiving any financial assistance from the state for a construction or renovation project to pay above-market wages to all workers on that project
  • SB 911 would have allowed an employee to bring a civil action against an individual at a business for failure to make payments to an employee welfare fund</li>
  • HB 6793 would have increased the penalty from 10% to 15% on employers that intentionally fail to declare the payment of wages on payroll records during the entire period the employer failed to declare those payments.

Workers’ Compensation

Many proposals aimed to expand workers’ compensation benefits and increased costs, but fortunately none of them passed.

Among the failed proposals were those:

  • Requiring 20% of any amount a health insurer recovers from a contested workers' compensation claim be paid to an employee with no reduction for attorney's fees, if the employee wins his or her claim (SB 427).
  • Extending full workers' compensation benefits to police officers who suffer a mental or emotional impairment caused by using or being subjected to, deadly force in the line of duty; and firefighters diagnosed with post-traumatic stress disorder caused by witnessing the death of another firefighter in the line of duty (SB 593).
  • Requiring workers’ comp awards or settlements to be paid to a deceased employees estate even if employee has no surviving spouse, dependents or next of kin (HB 5875).
  • Subjecting  an employer or other payor of income to a penalty of up to 4 times current monthly support for failure to withhold court odered child support (HB 6764).
  • Requiring an employer to reimburse a workers’ compensation claimant for lost wages when the claimant is required to appear at a deposition (HB 6872).

CHRO  

Added onto SB 446, a bill about domestic workers, was an amendment that made a number of changes to the statutes governing the procedures for claims at the Connecticut Commission on Human Rights and Opportunities.

Its passage will result in a number of changes in the way CHRO claims are handled, including a shortening of the complaint process time frames to expedite the handling of cases, and prohibiting the same person from being assigned to conduct mandatory mediation process and investigate the complaint. It also will transfer a number of powers from the commission's executive director to its legal staff.  Time will tell if these changes will be positive for the business community.

Miscellaneous:

The final four bills all passed and are likely to be signed into law by the governor:

  • SB 963 requires the state Board of Education to make a curriculum available to public schools on free market capitalism and the history of organized labor and the collective bargaining process.
  • SB 426 prohibits employers from requesting employees or prospective employees provide social media passwords to the employer, or requesting or requiring employees to invite the employer to join their personal online social network as a condition of employment.
  • SB 428 provides protection from workplace harassment or discrimination to unpaid interns. This bill will have minimal impact as most company employee policies have covered this for years.
  • HB 6707 spreads the cost of unemployment compensation from the employer to the business community as a whole for an individual terminated as a result of losing a driver's license necessary to perform their job as a result of drunk driving while off duty.

For more information about labor issues, contact CBIA’s Eric Gjede at 860.244.1931 | eric.gjede@cbia.com | @egjede

For more information about workers’ compensation issues, contact CBIA’s Louise DiCocco at 860.244.1169 or louise.dicocco@cbia.com.