#MandateWar Being Waged on Small Businesses in Connecticut

Issues & Policies

Every year the legislature’s Labor Committee drafts up schemes targeting certain big box retailers and fast food franchises in the state—claiming the large corporations are making billions so they can afford to pay extra costs to do business in Connecticut.

Now, some on the committee are taking aim at Connecticut's smallest businesses, waging a full-scale mandate war against the mom-and-pop competitors of the lawmakers’ usual targets.

Connecticut is already a tough place for small businesses. The Small Business & Entrepreneurship Council's latest Small Business Policy Index, which ranks the states on policy measures and costs impacting small business, placed Connecticut #41 this year—no better than where we were a year ago.

CNBC's America's Top States For Business 2014 rankings put us a dismal #47 for the cost of doing business, while Forbes' Best States for Business gave a slightly better #46 ranking.

Small businesses are often praised as the backbone of our economy, but it’s very possible we’ll break their backs if we keep adding more and more costs and workplace requirements.

Yet some on the committee apparently are looking to add more pressure on Connecticut’s small businesses by:

  • Expanding the state’s paid sick leave mandate to include small businesses
  • Implementing a new paid family leave policy to all businesses in the state

In recent Hartford Courant articles, the Labor Committee’s chairs indicated they would be proposing these measures, and a paid family leave bill already has been filed in the legislature and has the support of the committee chairs. 

Paid sick leave impact

You'll hear a lot of claims that paid sick leave has had no cost impact on businesses—based on a think tank study. But not only has the study been debunked, a review of every study conducted on every paid sick leave policy in effect across the U.S. tells a different story. 

Data shows that paid sick leave mandates have cost businesses money–including businesses that had a paid sick leave policy in place before the mandate was enacted. 

What’s more, there is zero evidence that paid sick leave policies have reduced employee turnover and zero evidence people are coming in to work sick less often.    

There is evidence, however, that the mandates have caused businesses to increase prices and reduce other employee benefits in order to offset the mandates’ costs. That results in employees taking home less pay.           

Paid family leave

Paid family leave talking points, which have saturated the airwaves in recent weeks, is that the U.S. and Connecticut are way behind the rest of the world in offering paid family leave.

Left unsaid is that while many other countries do offer more generous parental leave policies, according to a Pew Research Center study, they usually go hand in hand with a much higher gender pay gap.

But countries with no parental leave—like the U.S.–usually have much lower gender pay gaps.   

Also conveniently avoided is the question of cost. Not only will all employees have to give up a portion of their paychecks (again) to support such a program (whether they use the leave or not) but it will cost businesses and taxpayers a lot more on the back end as well. 

Washington state passed a similar law a few years ago, but stopped short of implementing paid family and medical leave because it was going to cost taxpayers $1.2 billion dollars every two years. 

The state’s historical pro-mandate attitude has made this state very difficult to operate a business.

What lawmakers often fail to realize is that the vast majority of businesses care deeply for their employees and provides every fringe benefit they can afford in order to make sure they retain their talented workforce. 

To improve Connecticut’s economic competitiveness, we need to ignore the feel-good talking points and think about how these policies will impact small businesses. We need to be backing small businesses in the state, not breaking their backs.  

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


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