Connecticut Employers Face Changes in the Law

Two recent changes in state law will affect Connecticut employers.  Although neither is effective immediately, you should begin to prepare for their impact on your operations.

Increase in Minimum Wage

Although Connecticut already has one of the highest minimum wages in the country, in June, Connecticut legislators passed a measure that will raise the state minimum wage from $8.25 per hour to $9.00 per  hour, phased in over the next two years.  The state minimum wage will rise to $8.70 per hour on January 1, 2014, and then leap to $9.00 per hour a year later on January 1, 2015.  Employers who are paying employees less than $9.00 per hour will need to prepare for the future.

State lawmakers did throw a small bone to employers of hotel and restaurant staff and bartenders.  These employers are allowed to “credit” tips earned by these workers against minimum wage requirements.  State law currently allows employers to take an 11% tip credit for bartenders and a 31% tip credit for hotel and restaurant employees, as long as the tips bump their hourly earnings above $8.00 per hour.  This means employers currently must pay bartenders at least $7.34 per hour and hotel and restaurant employees $5.69 per hour to meet minimum wage requirements.  Although the new minimum wage bill increases the total minimum wage for all employees, it also contains a provision that increases the tip credit for employees who receive tips.  The tip credit for hotel and restaurant employees goes up to 34.6% in January 2014 and 36.8% in January 2015, and for bartenders, that rate increases to 15.6% in January 2014 and 18.5% in January 2015.  These increases mean that hotel, restaurant, and bar owners who are subject to this tip credit provision may continue to pay these employees their current subminimum wage even after the minimum wage increases in 2014 and 2015.

Tip credits can be a headache for employers in the service industry, particularly trying to figure out which employees qualify for the credit.  The Connecticut Department of Labor has a website with helpful information on calculating the tip credit.  For additional information, you can check it out:  http://www.ctdol.state.ct.us/wgwkstnd/wage-hour/restaurant.htm.

Personnel Files

The Connecticut legislature also passed a bill that calls for significant changes to the state Personnel Files statute, which governs employee access to personnel records.  Beginning October 1, 2013, Connecticut employers will now be required to provide employees with a copy of any disciplinary documentation within one day of imposing such discipline.  Employees who are terminated must be provided with such documentation “immediately.”  The law also requires that employers state on any disciplinary documentation, termination notice, or performance evaluation that the employee has the right to submit a written statement disagreeing with the contents of the document.  Employers who have written forms for disciplinary notices should take time now to add this notice to those forms so that they are ready for the October 1 effective date.

In addition, under the current law, employees have a right to inspect their personnel files within a “reasonable time” after requesting review in writing.  The revised law gives current employees an opportunity to inspect within seven business days.  Former employees are given ten days.  Employees will also be entitled to a copy of their file.  Violations of the personnel file statute are punishable by fines.

There are a couple of wrinkles in this law that will need to be sorted out.  One question is when is the date that the discipline is “imposed”?  Is it the date that the employee is informed or the date that the decision is made?  And what kind of notice is appropriate?  Assuming that you provide your employees with written copies of their disciplinary notices, that should suffice for notice, unless the employee is not in the office for some reason.  We think that the Connecticut Department of Labor may adopt some regulations or guidelines to assist employers in interpreting this part of the statute, so stay tuned for further developments.  The statute also says that employees must receive

notice of “any” disciplinary documentation, but does not require that the documentation be provided to the employee.  So, if you have backup documentation supporting the decision, you may be required to turn that over if the employee requests a copy of his or her personnel file, but you may not be required to deliver that with the disciplinary notice itself.  And if the termination decision is made, but the employee is not in the office, what type of notice is required to satisfy the “immediacy” requirement?  All these will be issues that employers will need to wrestle with after October 1, 2013, so take the time now to update any policies that will be impacted by this new statute.

As always, if you have any questions, we encourage you to contact the attorneys at Skoler, Abbott & Presser.

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