State Supreme Court Ruling Hikes Workers’ Compensation Costs
A major Connecticut Supreme Court ruling has left public and private sector employers facing increased workers’ compensation costs.
Ruling March 18 in Gardner v. DMHAS, the court overturned earlier decisions by the Connecticut Appellate Court, the Compensation Review Board, and an administrative law judge.
This landmark decision reinstated certain benefits to levels nearly equivalent to those before the 1993 workers’ compensation reforms, effectively unravelling decades of progress creating a well-functioning system.
Workers’ compensation is designed as a no-fault system that ensures employees receive prompt and fair compensation for workplace injuries, regardless of employer responsibility.
In the 1990s, in response to rising costs, the state legislature reformed the workers’ compensation system to balance fairly compensating claimants and maintaining the affordability of benefits.
The reforms were successful—for instance, premium rates declined 11 consecutive years through 2025.
Negative Effect
The decrease in premiums has been a bright spot for Connecticut workers and businesses, demonstrating the prioritization of worker safety and allowing for more capital to be invested in the state’s economy.
As a result of the March 18 ruling, the value of many workers’ compensation awards and settlements will increase significantly, leading to substantially higher costs for the state, municipalities, businesses, and nonprofit employers.
These increases will strain businesses’ ability to invest and could negatively affect the state’s overall economic health.
These increases will strain businesses’ ability to invest and could negatively affect the state’s overall economic health.
Additionally, the state itself will higher workers’ compensation costs, inevitably impacting the state budget.
Given this decision’s substantial financial implications, immediate action by the legislature is necessary to prevent significant cost increases for employers and maintain a balance between fair compensation and ensuring system sustainability.
For more information, contact CBIA’s Pete Myers (860.244.1921).
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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.
just not worth being in business in the State of CT. The cost to work and live in this state is ridiculous.
Agreed. It seems every step taken is in the opposite direction that is needed. While we hear a lot of “pro-business” talk, actions speak louder than words. Hoping that the legislature does something to actually improve the business climate and affordability is not great long-term planning strategy.
As a small manufacturer in Bridgeport celebrating our 50th year anniversary, the costs continue to be prohibitive for growth in the beautiful state of Connecticut. The trickle-down effect of the ruling, among other affects, will be less benefits to employees. Connecticut has been an employer “guilty until proven innocent” state for many, many years. Now to reinstate levels prior to the 1993 workers’ comp reform act puts us on even more of a defensive posture to protect ourselves from unwarranted claims. I have to believe that the majority of manufacturers and businesses in general adhere to safe workplace practices for everyone’s benefit, employees, their families and the employer. For the Connecticut Supreme Court to drag us back to the discriminatory attitude towards business as the bad guy will only stifle growth and expansion. Having recently attended a meeting at Fairfield University with Connecticut’s Chief Manufacturing Officer, I was pleased to learn more about the many reasons for the graduating students to build careers in Connecticut. Then a few days later the article regarding the CT Supreme Court Ruling was publicized in the March 28th CBIA brief. I forwarded the article to the CMO with a short note stating that it looks like others in the state are not as concerned as you are with business growth and retention. What a shame. We also have manufacturing in Dallas, TX where we are considering an expansion in production through CAP X and employee investments.