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Lawmakers Back to Work Wasting No Time with Anti-Small Business Bills

On Thursday (Feb. 8) the Labor and Public Employees Committee met for the first time this session and voted across party lines to double down on its agenda from the previous year. The committee decided to move forward with drafting a bill to mandate all Connecticut employers to provide 40 hours of paid sick leave. The current law — passed in 2011 — mandates only those employers with at least 50 employees to provide this benefit. 

Despite the push from big labor, the paid sick leave mandate was met with overwhelming opposition from Connecticut’s businesses. In testimony last year, the Connecticut Business and Industry Association (CBIA) — 95% of its members are small businesses — explained that expanding this mandate “has the potential to be economically devasting to Connecticut.”  

Furthermore, the CBIA pointed out that when the original mandate was implemented in 2012, 53% of employers faced additional costs ranging between 2% to 5% to comply with the directive. 

The mandate’s effects are evident in a 2013 study conducted by the Employment Policies Institute (EPI), which revealed that many businesses reported having to reduce hours and benefits to offset the heightened costs imposed by the law. Some were compelled to lay off employees, while others opted to limit their expansion plans within the state.  

Yet businesses against the expanded mandate will face a larger hurdle to squash the concept as Gov. Ned Lamont expressed his support for it during his State of the State address on Wednesday (Feb. 7).  

Ahead of the Labor Committee, Gov. Lamont has already drafted a bill mirroring the committee’s concept, compelling employers of all sizes to provide 40 hours of paid sick time. His bill states that employees only need to submit a written statement when taking sick leave, with no obligation to provide details about the nature of their illness. If an employer insists on a doctor’s note, they must cover all associated out-of-pocket expenses incurred by the employee. This provision extends to situations involving paid leave due to family violence or sexual assault, recognizing the sensitive and tragic nature of such events. 

Under his proposal, employers would have to maintain records documenting the number of accrued and used hours. They must retain these records for three years. The records must be accessible to the Labor Commissioner and failure to adequately retain them will result in fines of up to $100.00 per violation. 

The committee also decided to initiate the drafting of a bill that would permit striking workers to access unemployment benefits. During last year’s session, the committee attempted to secure this benefit for employees opting to go on strike. However, the bill failed to progress beyond the committee stage, eventually meeting its demise before receiving a vote from either chamber. 

For context, unemployment benefits are funded through taxes paid by employers, meaning that businesses would be subsidizing strikes occurring within their own establishments.  

Notably, a similar proposal faced opposition in California in 2023, where Gov. Gavin Newsom vetoed the bill due to concerns about the states inability to afford it, given the substantial federal unemployment insurance debt of nearly $20 billion accrued during the pandemic. 

While Connecticut has repaid $1.2 billion to the federal government with funds from the American Rescue Plan Act (ARPA) for the borrowed amount during the initial two years of the pandemic, Gov. Lamont indicated in a Nov. 8 statement that the state might need to borrow again. 

In 2023, there was a sizable increase in work stoppages involving 464,410 workers, a trend anticipated to persist into 2024. Extending unemployment benefits to these workers could potentially result in more frequent and prolonged strikes, posing challenges to the solvency of the state’s Unemployment Trust Fund and necessitating increased borrowing from the federal government. 

It is important to point out that unions maintain special strike funds to compensate workers on the picket line. This could be a huge windfall for workers who may stand to receive higher compensation by receiving both unemployment benefits and strike funds compared to remaining on the job. 

Additionally, the committee is reviving a “One Fair Wage” bill that failed to garner a vote in either the House or Senate. This legislation aims to incorporate tipped workers — including bartenders and waitstaff — into the state’s minimum wage structure. Currently set at $15.69 an hour, the minimum wage automatically increases each year in line with the employment cost index, a measure of inflation. Presently, tipped workers receive $6.38 an hour. 

Seven states, including Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington, have already done away with the sub-minimum wage. Furthermore, both Washington D.C., and Chicago have adopted this policy. 

“One Fair Wage” raises questions about the fairness of the policy. An analysis from the Harvard Business School concluded that every $1.00 increase in San Francisco’s tipped minimum wage is associated with a 14% increase in the likelihood of median-rated restaurant closure. Moreover, a study by Cornell University revealed that states with higher tipped minimum wages generally experience lower average tip percentages compared to those with lower tipped wage requirements.    

But the proposals by big labor do not stop there, as the Connecticut AFL-CIO is gearing up for strong lobbying efforts and expecting significant favors in return for their support during this election year. 

According to its 2024 Legislative Agenda in addition to the previously mentioned concepts, the group is preparing to thwart any initiatives aimed at weakening occupational licensing standards. Connecticut currently ranks 17th highest in occupational licensing burdens, which creates barriers to individuals seeking to start new careers or businesses, especially those with low to moderate incomes. Removing these barriers is seen as beneficial to this demographic. 

The union is also pushing for higher taxes on the wealthy and corporations, advocating for them to “pay what they owe,” (though they failed to add a dollar amount for what is owed). Furthermore, they pledge to obstruct any endeavors that undermine collective bargaining rights, binding arbitration, prevailing wage standards and project labor agreements.  

Additionally, they aim to prevent privatization efforts within state government, including outsourcing to non-profits and expanding the use of public-private partnerships. 

Connecticut recently launched the “Make it Here” campaign, investing $1.8 million to counteract negative perceptions of the state. However, if these proposed bills pass, it will be harder for businesses to actually “make it here.” 

This Week on Yankee’s Podcast Y CT Matters 

What do we mean when we talk about the electrical grid? What are Independent System Operators (ISOs)? How will energy infrastructure and markets be impacted by electric vehicle mandates? Portia Conant — senior markets analyst from Yes Energy — joins the podcast to answer those questions and more. 

Click HERE to listen 

Meghan Portfolio

Meghan worked in the private sector for two decades in various roles in management, sales, and project management. She was an intern on a presidential campaign and field organizer in a governor’s race. Meghan, a Connecticut native, joined Yankee Institute in 2019 as the Development Manager. After two years with Yankee, she has moved into the policy space as Yankee’s Manager of Research and Analysis. When she isn’t keeping up with local and current news, she enjoys running–having completed seven marathons–and reading her way through Modern Library’s 100 Best Novels.

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