State to bill employers for each worker [New Britain Herald]

August 5, 2014

By SCOTT WHIPPLE | New Britain Herald

Most employers in Connecticut will be getting a bill from the state Department of Labor, charging them a fee for each person they employ.

A special assessment fee of $7.50 for each full-time employee is meant to help the state pay back the interest due on an $810 million federal loan borrowed during the recession to fund unemployment insurance benefits.

The notices telling each employer what they are required to pay are being sent out by the DOL and businesses will have 30 days to pay their bills. If full payment is not made within 60 days, employers will face a fine.

State Sen. Len Fasano, Senate minority leader pro tem, and state Rep. Larry Cafero, House Republican leader, alerted employers to this fee.

“Have 10 employees? Well get ready to fork over $75,” said Fasano. “This special assessment fee — a fancy way of saying ‘tax’ — is yet another burden on Connecticut employers. It comes when it’s increasingly difficult for businesses to grow and add jobs.”

“Employers have been shouldering this burden since 2011 and Connecticut still owes the federal government $432 million,” said Cafero. “At a time when our economic health is struggling, our employers will take a hit from this added fee.”

Fasano said if the state economy was healthier, the special assessment would not be as much of a burden. “Unfortunately, today there is no doubt that employers of all sizes will feel the impact of this added fee,” he said.

Connecticut is not alone in its situation with unemployment expenses. “Connecticut’s Trust Fund was badly battered during this past recession, when, along with other states, we were faced with increased unemployment claims,” state Labor Commissioner Sharon Palmer explained. “Currently, more than 20 other states are also paying back money that was borrowed for unemployment benefits. Thanks to efforts to reduce the balance on the loan, Connecticut’s special assessment has dropped from $25.50 per employee to $7.50. An improving economy and increasing job growth means fewer people need to file for unemployment benefits, which is helping to return the Trust Fund to solvency.” Palmer said that at the height of the recent recession, more than 175,000 unemployment benefit payments were being issued each week. This amounted to approximately $60 million weekly.

An employment and security advisory board consisting of management and labor representatives is currently studying solutions to ensure continued trust fund solvency and will be making recommendations, Palmer said.

Jim Albert, president and CEO, Bristol Chamber of Commerce and Central Connecticut Chambers of Commerce, predicted negative repercussions. “This special assessment … will likely result in hundreds, if not thousands, of investors and business leaders deciding not to open a business in Connecticut, not to invest more in growing a business in Connecticut, not to relocate a business to Connecticut, or decide it’s time to move a business out of Connecticut,” he warned. “The cumulative effect of this assessment, and others like it, becomes a huge drag on our economy, job growth and ultimately our quality of life as costs for doing business and living in Connecticut increase.” Albert said that special assessment reduces profits and “creates higher prices for goods and services produced in Connecticut which makes us less competitive.”