Labor Committee Bills Threaten Job Growth

A number of proposals unveiled at a Feb. 16 hearing of the General Assembly’s Labor and Public Employees Committee could pose problems for Connecticut employers.
At this point, many of the items are still one-line concept bills—but have descriptions that are strikingly similar to proposals from years past—and they threaten to increase the cost of doing business and creating jobs.
Several specific bills concern CBIA.
Two of them—SB 1 and HB 6212—will create a paid family and medical leave program in the state.
“CBIA supports businesses that voluntarily enact these policies on their own,” CBIA Assistant Counsel Eric Gjede testified.
“We do not support these across-the-board, inflexible mandates on businesses. We have seen how much this proposal will cost. Our own nonpartisan Office of Fiscal Analysis has taken a look at it, and it’s massive.”
The proposal would cost taxpayers $31 million in its first year alone—$13 million in startup costs and another $18 million each year to run the program.
Employers, taxpayers, and employees will bear these costs, with a portion of worker paychecks used to fund a program that would pay non-wage benefits for up to three months for absent employees.
It’s a bad deal for businesses that have to pay non-wage benefits for people while they’re out of the workplace,” Gjede said.
“It’s a bad deal for taxpayers . . . and it’s a bad deal for employees who have to see their paychecks deducted for a program they may never use.”

‘Flexibility Is Lost’

The Small Business & Entrepreneurial Council sees the paid family and medical leave proposals as mandates that not only mean higher labor costs, but also interfere with workforce management.
The council ranked Connecticut ranked 43rd in its 2017 Small Business Policy Index, which measures 55 factors covering taxes, rules and regulations (including workplace mandates), population growth, and state government spending and debt
“Flexibility between employer and employee, and in terms of managing a firm’s entire workforce, is lost,” the council said.

“Holding positions open, and shifting responsibilities or using temporary workers, raise costs.
"However, those costs are pushed much higher when mandated leave must also come with pay. In addition, the opportunities and costs of abuse expand.
“No matter how the compensation package or insurance is set up, mandated paid leave ultimately means higher labor costs.”

Minimum Wage Proposals

Two other bills—SB 13 and HB 6208—will increase the state's minimum wage to $15 per hour by 2023, then allow for annual increases each year thereafter.
In essence, this calls for a 50% increase in the minimum wage after Connecticut has already increased the minimum wage in each of the last four years.
“We’ve already had minimum wage increases in each of the last four years and what we’ve seen is businesses have been automating far faster than they had intended,” Gjede said.
“Given that we’ve only recovered about 70% of jobs lost in this state during the recession, I would just encourage the committee to think about what we’re doing when we’re going forward. We should be doing things that make hiring employees easier for businesses.”
In addition to those two minimum wage bills, a third proposal increases it for certain businesses—or penalizes them for not paying the set wage.

• HB 6901 imposes a penalty for each employee paid less than $15 per hour at businesses with 500 or more employees, or franchise businesses where all the franchisors collectively employ 500 or more employees. In a past session, this bill was described by the media as “Connecticut’s novel way to kill jobs.”
• SB 747 prohibits employers from using "on-call" shift scheduling. Employers who use this type of scheduling would be unable to get more help when the business is busy, or forced to take a loss when business is slow, or the materials needed for a particular job are unavailable.
• HB 5591, as discussed previously, requires employees be paid the same for comparable work rather than equal work. Under this bill, anyone with the same title must be compensated the same, regardless of their productivity. This should be troubling, particularly for small businesses that want to retain top talent.
• HB 6914 mandates that individuals performing janitorial work be given a 30-hour work week. The goal is to purge certain service unions of their part-time workers in order to have fewer, but more loyal, full-time workers. However, it could force business to pay for services they may not need, or pay to keep the lights on longer for fewer janitors to do the same job.
• HB 6668 is a one-line bill that amends the general statutes to protect pregnant women in the workplace. It does not suggest how to achieve this goal beyond the protections state and federal laws already provide—and which CBIA strongly supports. CBIA will be monitoring this bill as it develops beyond its current concept stage.

We've shared our concerns with these bills and invite you to share your thoughts.

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