Labor and Public Employees Committee
JOINT FAVORABLE REPORT
Bill No.: HB-5377
AN ACT CONCERNING THE REMOVAL OF COVID-19 RELATED LAYOFFS
FROM THE UNEMPLOYMENT COMPENSATION EXPERIENCE ACCOUNT
Title: FOR THE CALENDAR YEAR 2021.
Vote Date: 2/25/2021
Vote Action: Vote to Draft
PH Date: 2/18/2021
File No.:
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Labor and Public Employees Committee
REASONS FOR BILL:
The global COVID-19 pandemic has forced the closing of many businesses and layoffs for
non-essential employees. There is a need to protect employers from having their experience
penalized since these closings were mandated and not their fault.
RESPONSE FROM ADMINISTRATION/AGENCY:
CHRISTINE CONLEY, STATE REPRESENTATIVE, 40TH DISTRICT
CATHY OSTEN, STATE SENATOR, 19TH DISTRICT
Unemployment in 2020 averaged more than 7%, which is double year 2019's average
according to the CT Dept. of Research Office. The hardest hit industry is leisure and
hospitality, including restaurants, hotels, casinos, arts and sports facilities, bars and other
providers of service, recreation and entertainment. This industry lost about 20% of its jobs.
The southeastern area of CT relies heavily on this industry. Business owners need relief and
should not be penalized for losing staff during this pandemic. This bill would provide a
financial break to businesses by preventing the rate they pay into the Unemployment
Compensation Experience Account from being affected by layoffs caused by COVID-19.
They have lost employees, customers and some even are in danger of losing their
businesses. The loss of funds to the Unemployment Compensation Experience Account can
be offset with CARES Act money or other federal funds rather than by placing any additional
strain on business owners.
NATURE AND SOURCES OF SUPPORT
STEPHEN ANDERSON, PRESIDENT, CSEA SEIU, LOCAL 2001
They are in support of this bill.
SAL LUCIANO, PRESIDENT, CT AFL-CIO
Like many states, CT's unemployment insurance program is designed so employers that lay
off employees with greater frequency face higher UI taxes than employers that maintain
stable employment. Each employer's annual layoff history determines its experience rating.
Employers who issue layoffs in any single year will see their UI tax rate negatively affected.
This normally makes sense, but amid a global pandemic some non-essential businesses
have been more heavily impacted than others. Layoffs were related to COVID-19 and not due
to poor management. By freezing employer experience rating at pre-pandemic levels, CT can
focus on reopening businesses when health conditions warrant. This bill reduces burdens on
struggling businesses.
ANDY MARKOWSKI, STATE DIRECTOR, NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
This bill acknowledges that small businesses should not be penalized or suffer any further
financial distress as a result of the record unemployment and layoffs that were through no
fault of their own. It is vital that, coming out of the pandemic, there are no new costs,
surcharges or fees for small businesses through the state's unemployment compensation
insurance program. It is especially important to provide certainty and help with economic
recovery.
LUMBER DEALERS ASSOCIATION OF CONNECTICUT
This bill will prevent employers' experience ratings and tax rates from being
disproportionately inflated by pandemic-related layoffs. The last thing struggling small
businesses need right now is to be further burdened with higher unemployment insurance
costs. It will provide critical relief for employers across CT.
STACY ZIMMERMAN, ASSOCIATE DIRECTOR, SEIU CT STATE COUNCIL
Unemployment insurance is a critical component of our social safety net and a manifestation
of the idea that we have an obligation as humans to help people when they need it. The virus
has taken too many lives from us. We cannot let it also punish people for things beyond our
control. This bill is a commonsense response to the continued challenges we face as a result
of the pandemic.
ERIC GJEDE, VICE PRESIDENT OF GOVERNMENT AFFAIRS, CBIA
The state's unemployment compensation system proved to be a critical safety net during the
pandemic. Despite chronic solvency issues with the state unemployment trust fund, every
claim for benefits will ultimately be paid for by CT businesses. These include claims from
those who were previously ineligible for benefits and many businesses who never paid into
the system. The levels of unemployment were not a result of mismanagement or a result of
economic downturns, but rather the result of a global pandemic when the government
responded by closing businesses. Given the fact that the business community was required
by law to shut down under the penalty, it would be inequitable to allow adjustments to
businesses' experience rates to reflect this forced unemployment. However, they feel a more
permanent fix is needed via an executive or special act.
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NATURE AND SOURCES OF OPPOSITION:
None submitted.
Reported by: Marie Knudsen, Assistant Clerk Date: March 15, 2021
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