CT…NOT OPEN FOR BUSINESS?

BY: Adam Gavriel

When you think about the government of the United States, what’s the first thing that comes to mind?

Democracy. George Washington. Founding Fathers. Leaders who would do anything to get the job done, by the people and for the people.

Is that what we get today?

According to a report from the Connecticut Business and Industry Association, the Connecticut government has come up with numerous workplace measures that will make it harder for the businessman in CT. Most importantly is the raise of mandatory wages, unemployment benefits, and steeper administrative hurdles.

First, workers compensation changes:

HB 6556 will allow employees to make new “sick building” illness claims, and make it harder for employers to challenge them.

SB 823 will allow employees to pursue workers’ compensation claims for psychological injuries.

SB 907 will create a paperwork nightmare for employers to challenge workers’ compensation claims, while SB 1074 will, with some modifications, stop medical claims and expenses from going through the roof for employers.

This all sounds great for employees, but if employer’s costs spike, hiring will plummet.

On to Unemployment Compensation:

The labor committee approved SB 188 which will allow teachers to collect benefits while pursuing further education, instead of being “available for work” or “actively looking for a new job” the two key features in being available for unemployment benefits.

SB 909 will penalize the false unemployment claims of individuals, but punish employers in a case where the Department of Labor paid out and the affected businesses did not participate in the claims procedure.

As we know, if you keep up with the blog, that Small Businesses drive the economy, well, here’s one from Connecticut… HB 6451 will penalize employers if they fail to register with the Department of Labor with unemployment compensation within 30 days of starting or acquiring a business. The committee would also approve a 10% to 15% penalty for employers if they willfully fail to declare wage payments on quarterly reports.

Again, more and more costs for managers and employers.

How about Wages and Benefits? 

With a minimum wage hike in SB 387, many economists believe this will reduce entry-level jobs, and a standard wage bill (HB 5756) that will discourage companies from doing business with the state.

SB 906 will make the process for direct deposit for employees have to go through loopholes, requiring more training and or the hiring of another employee.

What most of these new bills have in common is that they will severely raise costs for Connecticut employers. Though the minds of politicians seems to be in the correct place, the practices are not following suit. It is understandable that politicians would want to increase the wages of their workers, but it is the employers who will suffer immediately, and then in turn the employees who will take the ultimate hit.

This is specifically the case with SB 387, which many believe will ultimately destroy the entry-level opportunities that are needed for college and high school graduates. A recent report from Yahoo! News cited that 40% of college graduates are unemployed or underemployed, having difficulties finding the correct entry-level job that can provide the training necessary to build a career. If managers have to pay higher wages for entry-level workers than they already have to, they’re going to be very picky about the talent that they choose. This of course will call for a huge increase in underemployed and unemployed college graduates.

As a small business directly affected by these measures, at Crossroads Consulting we will continue to make sure that we do what ever it takes to get you into one of our over 50 open positions.

As we try to put the ‘human’ back into ‘human resources,’ we hope the government remembers that they operate ‘for the people.’

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