The Aftermath: Developments From The 2016 Session of The Connecticut General Assembly Affecting The Workplace

blog1The 2016 session of the Connecticut General Assembly has just concluded, along with subsequent “special sessions.” Most prominently from an employment law standpoint, the General Assembly passed (and the Governor signed) legislation that: 1) prohibits most employers from inquiring via an initial employment application into a job applicant’s prior criminal history, 2) establishes a state managed retirement plan for private sector workers, 3) authorizes the use of direct deposit and payroll cards for payment of wages, 4) explicitly authorizes employers to pay wages biweekly, 5) revises the state’s FMLA to conform with the federal FMLA with respect to leave connected to a relative’s military service, 6) places restrictions on non-competition agreements involving physicians, and 7) establishes a monetary benefit for firefighters suffering from certain cancers.

The following is a concise description of employment-related bills that were passed by the General Assembly that may be of interest.

Public Act 16-83: AN ACT CONCERNING FAIR CHANCE EMPLOYMENT.  This Act, which has been signed by the Governor and takes effect on January 1, 2017, prevents employers from requiring prospective employees to disclose any prior arrest, criminal charges or conviction on an initial employment application, unless 1) the employer is otherwise required to do so by law, or 2) a security, fidelity or equivalent bond is required for the position.  An applicant or employee aggrieved by a violation of this Act can file a complaint with the Department of Labor.  This Act also establishes a “fair chance employment task force” to study issues such as the employment opportunities available to individuals with criminal histories; the task force is to submit its findings and recommendations to the General Assembly by January 1, 2017.

Public Act 16-29: AN ACT CREATING THE CONNECTICUT RETIREMENT SECURITY PROGRAM. This Act, which has been signed by the Governor, establishes the “Connecticut Retirement Security Program” for the purpose of providing retirement savings packages for private sector employees. As modified by the Public Act 16-3 (May Special Session), the Act creates the Connecticut Retirement Security Authority to manage a program of Roth individual retirement accounts for eligible employees, who are automatically enrolled in the plan unless they opt out. The Act applies to all private sector employers that employ at least five people, each of whom was paid at least $5,000 in wages in the preceding calendar year; eligible employees are those who have worked for a covered employer for a minimum of 120 days and are at least age 19 years old. Employers must enroll employees (via withholding) who do not opt out with a contribution of at least 3% but not more than 6% of the employee’s taxable wages. The Act sets the default contribution rate at 3% for employees who do not select their own contribution rate.  Enrolled employees may select from retirement investment choices that are available from approved vendors.  Employers have until January 1, 2018 to provide to their employees informational materials prepared by the Authority concerning the program, and thereafter within 30 days of hire of an employee; employers then are to commence the automatic withholding of employee wages within 60 days of providing such materials to a covered employee.  Employers are expressly prohibited from contributing to the program.

Public Act 16-125: AN ACT ALLOWING EMPLOYERS TO PAY WAGES USING PAYROLL CARDS. This Act, which was signed by the Governor and takes effect on October 1, 2016, allows employers to pay wages to employees via “payroll cards”, provided that the employee has been given the option of payment by check and direct deposit and the employee voluntarily then consents to the payroll card option.  A “payroll card” is defined as a stored value card used by an employee to access wages from a payroll card account established at a financial institution by an employer and that is redeemable (at the employee’s election) at merchants or service providers, bank branches or automated teller machines; it does not include a gift certificate.  The Act generally prohibits the assessment of fees to the employee.  This Act also expressly provides that employers may utilize direct deposit for payment of wages, but only upon a request by the employee.  The Act further permits employers, regardless of how paying their employees, to provide them with an electronic record of the employee’s hours worked, gross earnings, deductions, and net earnings in lieu of the traditional paper pay stub, provided that the employee consents.

Public Act 16-169: AN ACT CONCERNING UNEMPLOYMENT COMPENSATION APPEALS AND HEARINGS AND MINOR AND TECHNICAL REVISIONS TO THE GENERAL STATUTES RELATING TO THE LABOR DEPARTMENT. This Act, which has been signed by the Governor, specifically authorizes employers to pay their employees bi-weekly, a practice that is almost universal but has been technically illegal. This change took effect upon passage (June 6, 2016).  This Act also eliminates a requirement that the Commissioner of Labor adopt regulations specifying the circumstances that a private employer could require an employee to submit to a urinalysis drug test because of a reasonable suspicion that the employee is under the influence of drugs or alcohol.  This Act also makes various procedural changes to the unemployment compensation appeals and hearings process, including expressly permitting the filing of appeals electronically, and makes various “minor” and technical revisions to the general statutes affecting the Department of Labor.

Public Act 16-195: AN ACT CONCERNING THE CONNECTICUT FAMILY AND MEDICAL LEAVE ACT AND ACTIVE DUTY MILITARY SERVICE. This Act, which was signed by the Governor and took effect upon passage (June 7, 2016), requires the State and private employers covered by Connecticut’s Family and Medical Leave Act [“FMLA”] to allow eligible employees to take unpaid FMLA leave under the circumstances where regulations for the federal FMLA determine a need exists arising from the employee’s spouse, son or daughter, or parent being on active duty or notified of an impending call or order to active duty in the armed forces.  The amount of leave would be the same as that provided under the state FMLA for other qualifying reasons.

Public Act 16-95: AN ACT CONCERNING MATTERS AFFECTING PHYSICIANS, HEALTH CARE FACILITIES AND MEDICAL FOUNDATIONS. This Act, which has been signed by the Governor and takes effect on July 1, 2016, establishes additional limitations on physician non-compete agreements. The Act confirms the general requirements that such agreements/”covenants not to compete” be 1) necessary to protect a legitimate business interest, 2) “reasonably” limited in time, geographic scope, and practice restrictions as needed to protect that interest, and 3) otherwise consistent with the law and public policy. However, this Act adds further restrictions for such covenants that are entered into, amended, or renewed on or after July 1, 2016 by prohibiting the restriction of a physician’s competitive activities 1) for longer than one year and 2) beyond 15 miles from the primary site where the physician practices (the facility or location from where a majority of the revenue from the physician’s services is generated).  The Act also provides that these covenants are unenforceable against the physician if (1) the employment contract or agreement expires and is not renewed or (2) the employer terminates the employment or contractual relationship without cause. This Act provides that if a covenant is rendered void and unenforceable due to the Act’s provisions, the remaining provisions of the agreement remain in full force and effect (including provisions requiring the payment of damages for injuries suffered from the agreement’s termination).

Public Act 16-10: AN ACT ESTABLISHING A FIREFIGHTERS CANCER RELIEF PROGRAM. This Act, which was signed by the Governor, creates the firefighters cancer relief program to provide wage replacement benefits to eligible paid and volunteer firefighters diagnosed with certain forms of cancer. This program will be funded through a diversion of money from the enhanced emergency 9-1-1 program.  The Act includes various eligibility requirements for firefighters to receive such benefits, including 1) passing a pre-employment physical examination (and exams in each subsequent year) that fail to reveal any evidence of cancer, 2) not using tobacco products within 15 years of applying for benefits, 3) having a disease that results from exposure to heat, radiation, or a known carcinogen, and 4) having worked or volunteered at a fire department for at least five years since February 1, 2017. This last provision would appear to indicate that eligibility actually commences on February 1, 2022, notwithstanding another portion of the Act that states that eligibility for this benefit commences on July 1, 2019.  Retired firefighters, who are otherwise eligible, may apply for benefits up to five years from the date such individual last served as a firefighter.

The Act establishes a new cancer relief subcommittee of the Connecticut State Firefighters Association to approve and award benefits under the program. The weekly benefit awarded by the subcommittee to any firefighter cannot exceed 100% of the average weekly earnings of all workers in the state; the benefit cannot be provided for more than two years.  The Act prohibits a firefighter who receives benefits under this program from concurrently receiving unemployment compensation, worker’s compensation benefits or any other municipal, state, or federal wage replacement benefits.  The receipt of benefits under this program cannot be used as evidence for or an acknowledgement of liability under the workers’ compensation act.

Public Act 16-73: AN ACT CONCERNING WORKERS’ COMPENSATION INSURANCE AND SOLE PROPRIETORS. This Act, which was signed by the Governor, allows certain sole proprietors who do not carry workers’ compensation insurance to be eligible to work on public works projects.

Special Act 16-16: AN ACT CONCERNING THE CITY OF BRIDGEPORT AND ANNUAL MUNICIPAL EMPLOYEES’ RETIREMENT SYSTEM AMORTIZATION CONTRIBUTION PAYMENTS. This Special Act, which signed by the Governor, provided a revised schedule for the City of Bridgeport to make its annual municipal employees’ retirement system amortization contribution payments toward the unfunded accrued liability for police and fire members in the municipal employees’ retirement system for the 2016-17 through 2042-2043 fiscal years. It appeared to reduce such payments through June 30, 2022, and then increase them for the period of July 1, 2025 through June 30, 2043.  This Act specifically does not affect the City’s monthly required normal pension contributions to the municipal employee’s retirement system. Subsequently, Section 179 of Public Act 16-3 (May Special Session), from the so-called “implementer”, further modified Special Act 16-16 and instead limits Bridgeport’s reduced payments to the 2016-2017 and 2017-2018 fiscal years and requires increased payments to make up the difference in the 2020-2021 through 2022-2023 fiscal years.

Public Act 16-170: AN ACT CONCERNING THE REPEAL OF OBSOLETE REPORTS AND PROGRAMS INVOLVING THE LABOR DEPARTMENT. The Act, which has been signed by the Governor, repeals various reports currently statutorily required of the Department of Labor that are deemed to be either obsolete or duplicative.

Public Act 16-3 (May Special Session): AN ACT CONCERNING REVENUE AND OTHER ITEMS TO IMPLEMENT THE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2017. The so-called “Implementer” has been signed by the Governor and contains many relevant provisions (although often not connected with the stated purpose of the Act).

-The Act increases, from $225 to $325, the first day’s compensation paid to State Board of Mediation and Arbitration arbitrators who preside over a proceeding as a three-member panel.

-The Act increases, from $25 to $200, the fee an employer and its employee must each pay when submitting a grievance or dispute to the State Board of Mediation and Arbitration. The fee must be refunded if the parties agree to have the public member arbitrate the matter.

-The Act caps annual pensions at $125,000 for any nonunion members of the State Employees Retirement System who are initially hired by the state on or after July 1, 2016, regardless of their years of vesting service or any other System requirements they have completed when they retire. It requires such a member’s annual pension to be reduced to $125,000 when it is calculated at the member’s retirement or after a cost of living adjustment, and also prohibits such members with $125,000 annual pensions from receiving future cost of living adjustments.

-The Act permits the Department of Administrative Services commissioner and the Office of Policy and Management secretary to establish health insurance premium cost sharing requirements for non-union classified and unclassified state officers and employees. The cost sharing can be for up to 18% of the total premium equivalent, as determined by the comptroller.

VETOED-Public Act 16-98: AN ACT CONCERNING OPERATORS OF ATHLETIC ACTIVITIES, COACHES AND REFEREES AND THE EMPLOYER-EMPLOYEE RELATIONSHIP. This Act, which was vetoed by the Governor, would have provided that no employer-employee relationship is deemed to exist between any operator of any organized athletic activity (whether the operator is a municipality, non-profit entity, or a business) and any individual who is retained by such an operator as a coach or referee of such athletic activity, provided that the operator and individual could mutually agree (in writing) to enter into an employer-employee relationship.