Capitol Connection: A Cloak & Dagger Attack on Businesses

April 8, 2014

Connecticut’s economy is struggling and unemployment is unacceptably high. Yet, we continue to hear talk of adding more burdens to businesses, making it increasingly difficult for employers to sustain current jobs and grow new ones.

Despite these warnings and the largest minimum wage increase in the country, there are still those who want even more regulations and even higher mandated wages.

A bill under consideration by the Connecticut legislature would require employers with 500 workers or more to pay their employees at least 130 percent of the minimum wage. Under the legislation, if the employer does not pay employees the increased wage, the business would be charged a $1 penalty fee for every working hour paid below that rate.

The proposed legislation means employers would have to raise their lowest wages to $11.90 an hour next year and, as the minimum wage increases, to $13.13 by 2017. With a current minimum wage at $8.70, that is an increase of over 50 percent in just 3 years! Employers who could not afford these increased wages would be charged huge fines.

I call this the “cloak and dagger” bill because just as the legislature finished debating minimum wage and a plan was signed in to law, this bill emerges ready to inflict more burdens on the people of Connecticut.

If passed, this bill would actually punish businesses for paying the minimum wage approved by the legislature this year. Employers would pay almost $105 million in penalty fees in the first year and up to $222 million in 2016. The state will swipe hundreds of millions of dollars from employers – the people we need to spark economic development and provide jobs for our families. And guess where the money goes? To the general fund of the state. Are we still open for business?

The burden this would place on employers is astronomical. Connecticut is in a state of fiscal distress and business owners are suffering from high taxes and a stalled economy. Forcing them to pay hourly wages at rates far exceeding even the drastic increases approved by the General Assembly this year is not feasible.

Something has got to give. As required wage rates increase, I fear that businesses will be forced to cut jobs so they can afford to pay their staff. I also worry that employers will have to increase prices on their goods and services so they can stay in business. That means everything from tires to groceries get more expensive, and burdens will expand to families across the state.

This bill would not only apply to individual businesses with over 500 workers, but also to franchises with more than 500 workers throughout the state. That means your local Dunkin Donuts, Stop and Shop or Ace Hardware would also be subject to pay hugely inflated minimum wages.

Even companies and franchises that downsize next year will still be subject to penalties. As written, the bill states that all those businesses with 500 or more employees in any one quarter in the previous year would have to pay these inflated wages. There would be no escaping the penalties, even for businesses that are pushed to cut jobs.

As a business owner, I want to provide stable and sufficient wages to attract hard-working dedicated employees. But when the government dictates wage increases at this level it stifles business and interferes with economic growth. This bill is a sneaky attack on employers, and its effects would impair quality of life across the state.