Costly Workplace Mandates Hurt State’s Small Businesses

Business leaders used the beginning of Small Business Week to highlight the damaging impact a series of proposed workplace mandates will have on Connecticut’s fragile economy and job growth.
CBIA president and CEO Joe Brennan joined representatives from the Connecticut Food Association, the Connecticut Restaurant Association, and the National Federation of Independent Business at the April 30 press conference.

The group warned state lawmakers about the impact that five bills will have on businesses—particularly small businesses, the backbone of Connecticut’s economy.
Those bills include family and medical leave, expanded paid sick leave, minimum wage hikes, and sweeping changes to the state’s workplace harassment laws.
Those mandates could cost taxpayers and businesses as much as $530 million in implementation and compliance costs.
“We’re certainly mindful of the environment in Connecticut and across the country,” Brennan said, “and we want Connecticut employers to be as progressive as possible in offering the best wages and benefits to their employees.”

Restraining Job, Economic Growth

However, he said, business leaders are “all too aware of where Connecticut ranks across the country when it comes to job growth and economic growth.”
Unfortunately, Brennan added, the mandates now being considered by the General Assembly are a problem for Connecticut employers.

"We've talked over the years about the difficulty of having one-size-fits-all mandates on employers and how difficult that makes it for businesses that are struggling to succeed and keep people employed here," he said.
"This list of bills is the same situation. They add costs and administrative burdens on job creators when we should be unlocking—not restraining—the state's economic potential."

Cumulative Effect

Connecticut NFIB chair Wendy Traub owns a small construction company with her husband in northwest Connecticut.
She called the FMLA proposal "yet another costly mandate."
"The most damaging change for businesses that I represent would be the extension of FMLA to private-sector employers with two or more employees as opposed to the current 75-person threshold," she said.
"Requiring companies of our size to offer up to 12 weeks leave will be very difficult. There's going to be recruiting and training costs, and overtime.
"The cost associated with these requirements will have a negative impact on the bottom line of a lot of companies in Connecticut that are operating on very small profit margins."
Traub said FMLA and other mandates will have "a devastating cumulative effect on small businesses at a time when we're looking to the state to become more business friendly.
"We feel that it may have the opposite effect, and that it causes downsizing and maybe even the loss of more Connecticut companies and, therefore, the loss of more jobs."

'Undermining Economy'

CFA president Wayne Pesce said a bill expanding paid sick leave to all businesses with 20 or more employees will undoubtedly hurt state businesses, including his member companies.
"Our state's economy is fragile and now is not the time for increased regulation and cost on businesses," he said.
"Nearly 90% of business surveyed after a new 2011 law offered some form of paid sick leave to their employees but at least 53% of those businesses experienced a cost increase due to that mandate."
Pesce said that with the state's economy finally beginning to show signs of life, now is not the time for another workplace mandate.

"Allowing businesses to decide how to best put their profits back into the market is not a bad thing," he said.
"Traditional brick-and-mortar retailers are under attack by online entities from outside the state.
"Mandating increased benefits like paid sick leave puts more pressure on Connecticut businesses, further undermining our state's speedy economic recovery."

'Difficult Decisions'

CRA executive director Scott Dolch noted that Connecticut has hiked its minimum wage 31% over the last 10 years, ranking the state ninth in the country, but a bill now before lawmakers raises it another 48.5%.
"Any increase in our minimum wage will have a negative effect not only on the restaurant and hospitality industry, but on the economic recovery and future growth of our state," Dolch said.
"Small business owners have already had to withstand two of the highest tax increases in Connecticut's history over the last six years."
Dolch said the hike will force "small business owners across the state to make very difficult decisions in order to survive."
CBIA's Eric Gjede noted that Connecticut is one of only three states that require sexual harassment prevention training for certain employers, adding that businesses "go to incredible lengths to ensure safe workplaces for their employees, and are willing to do even more."
But he said SB 132 and HB 5043, the two bills that expand training requirements to small business while exposing all employers to greater liability, go too far.
"SB 132 provides for significant new monetary damages and remedies, including forced promotion," Gjede said.
“SB 132 and HB 5043 represent costly, severe, and unnecessary changes to existing requirements that were finally starting to work the way they were intended.”

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Do these workplace mandates hurt your business? Please contact your legislators now and share your story.