Labor Committee Raises Paid COVID Leave, UI Experience Rate Bills

The General Assembly’s Labor and Public Employees Committee raised another package of troubling bills at a March 15 public hearing.

Among the measures that raised concerns among employers was SB 422, which creates a fund providing tax-free income in the form of paid sick leave to individuals impacted by the COVID-19 pandemic.

There are a number of other bills already put forward by the committee that do the same thing. 

The paid leave appears, at first glance, to be funded via an appropriation from the state’s general fund.

Retroactive

However, lines 243-246 suggest that the first 80 hours of paid leave “shall come from the employee’s employer.”

This sick leave is retroactive up to four weeks after the expiration of the governor’s emergency declaration.

The bill’s language suggests that the first 80 hours of paid leave “shall come from the employee’s employer.”

Unlike the paid sick leave provided by the federal Families First Coronavirus Response Act in 2020, SB 422 does not offer employers a corresponding payroll tax credit to fund this leave.

As a result, Connecticut employers will incur the cost of a new labor mandate at a time they can least afford it. 

Replacement Workers

HB 5444, which includes a section adding the permanent replacement of striking workers to the list of unfair labor practices and increases civil penalties.

The change is partially duplicative of federal law, at least in the sense that it would replicates the pro-labor aspects of U.S. statutes while omitting sections designed to protect businesses. 

The National Labor Relations Act already governs conditions where an employer can permanently replace a striking worker.

The National Labor Relations Act already governs conditions where an employer can permanently replace a striking worker and when doing so is considered an unfair labor practice.

For example, strikers that engage in serious misconduct during a strike may be refused reinstatement to their former jobs at the conclusion of the strike.

Examples of such misconduct include, among other things, violence and threats of violence.

‘Sit Down’ Strikes

Further, “sit down” strikes, when employees simply stay in a plant and refuse to work, thus depriving the owner of property, are not protected by the law.

HB 5444 makes no effort to distinguish between lawful or unlawful strikes, yet deems the permanent replacement of any striking worker, regardless of their conduct or purpose, as an unfair labor practice. 

I appreciate these business leaders sharing what so many of their peers are telling me—what kind of message are lawmakers sending #smallbiz with bills like this? How does this solve the labor shortage crisis? How does it help #RebuildCT? Where's the focus? https://t.co/kXIt29X0KR

— Chris DiPentima (@ChrisDipentima) March 16, 2022

The enactment of Section 1 of HB 5444 could also result in significant safety issues.

If an employer cannot replace striking workers without the threat of increased financial liability, they may be unable to provide important products or services to individuals whose lives depend on them. 

Unemployment Experience Rate

Finally, the committee found its way to a legitimate issue causing economic harm to some businesses.

HB 5442 features a statement of purpose that includes the language “To study the effect on certain businesses that had their experience rate increase despite the passage of Public Act 21-5.”

Public Act 21-5 was legislation passed in the 2021 session that attempted to shield unemployment experience rates from the impact of elevated levels of unemployment. 

The state’s Department of Labor is better suited to conduct a study of the unemployment system given it administers the program.

The problem with HB 5442, however, is the language directing the Workers’ Compensation Commission to study “the effects on certain businesses that had their experience rate increase.”

Presumably, the intention was to limit the scope of the study to increases in the experience rate related to Public Act 21-5.

Further, the state’s Department of Labor is better suited to conduct a study of the unemployment system given it administers the program.

Legitimate Issue

Drafting errors aside, HB 5442’s statement of purpose raises a legitimate issue.

Lawmakers sought to shield employers from having their unemployment experience rates impacted by the elevated levels of pandemic-related unemployment.

An established business’ experience rate is calculated by reviewing how often employees accessed the unemployment system over the three preceding years.

An employer in this circumstance faces a temporarily high experience rate based on one year of high usage.

Public Act 21-5 sought to protect businesses by omitting the 2020 and 2021 experience years from that calculation.

While most businesses benefited from this omission, there are instances where businesses had high unemployment usage in 2019 but did not have any employees access the system during 2020 and 2021.

The result for an employer in this circumstance is a temporarily high experience rate based on one year of high unemployment usage, which can result in a huge increase in state unemployment taxes.    

It is disappointing the committee does not put the same effort and attention to detail in measures that could help businesses as they do coming up with new ways to cause economic harm. 

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For more information, contact CBIA’s Eric Gjede (860.480.1784) | @egjede