Capitol Connection: Here We Go Again! ‘Cloak & Dagger’ Bill Resurfaces

Here we go again.

A bill under consideration by the Connecticut legislature this year would punish large employers who pay their employees less than $15 an hour by charging a $1 per hour per employee penalty fee.

If this obscure tax sounds familiar to you, you have a good memory.

Last year, a very similar proposal was before the legislature. I called it the “cloak and dagger” bill because just as the legislature finished debating minimum wage and a plan was signed into law, this bill emerged ready to inflict more burdens on the people of Connecticut.

Connecticut raised its minimum wage last year when the legislature approved a plan that would stagger the increase to $9.15 in 2015, $9.60 in 2016, and $10.10 in 2017. This change was widely debated and heavily fought by employers and employees alike who feared a higher minimum wage would increase business costs, and thereby put current jobs and job growth in jeopardy.

Nevertheless, the legislature made a decision to increase the wage and the law was set. Then the cloak and dagger bill showed up and said that CT’s record-setting high wage was still not good enough.

This bill, modeled from last year’s failed proposal, would apply to companies with 500 employees or more. That also includes franchises with more than 500 workers throughout the state. So, your local Dunkin Donuts, Stop and Shop, and Ace Hardware could also be subject to huge fees or grossly inflated required wages.

Last year, this proposal was estimated to cost employers up to $165 million in penalty fees in the first year and almost $220 million in subsequent years. While an estimate of how much this year’s bill will cost employers has not been calculated yet, it will surely be in the millions.

The problem with this idea is that it punishes companies for paying the minimum wage. It even punishes companies for paying above the minimum wage.

Simply put, this is another tax on employers that would severely stunt job growth, and likely cause some jobs to disappear.

Speaking as a business owner, I know that employers want to provide stable and sufficient wages to attract the best employees. But when the state tries to force such a high wage, a wage more than 60% greater than our current record-setting minimum wage, we cannot expect businesses to grow and flourish. And if businesses wither, so too will jobs.