Connecticut Legislators Considering Additional Employment Requirements

     Although Connecticut is already one of the most highly regulated states when it comes to employment law, government officials are currently considering a number of changes that would impose greater employer requirements in the areas of non-compete agreements, disclosure of salary ranges, and paid sick leave.

      Non-Compete Agreements

      Aside from current attempts by the federal government to possibly outlaw or severely restrict non-compete agreements, a bill introduced in Connecticut would significantly limit them. HB 6594. In particular, non-compete agreements signed on or after 7/1/23 would be enforceable only if they were limited to one year in duration following termination, and tailored to protect a legitimate business interest that could not be reasonably protected by some other means like a non-disclosure or non-solicitation agreement. Further, the law would impose limits on geographic scope, type of work prohibited, and the type of employee restricted.

      The 1 year restriction period could be enlarged to 2 years if the employee was paid their base salary and benefits, minus interim earnings, during that 2 year period. Geographic restrictions beyond locations where the employee provided services or had a material presence during their final 2 years of employment, or banning work the employee did not perform during their final 2 years would be presumptively unenforceable.

      In addition, only exempt employees earning 3 times the minimum wage, or independent contractors earning 5 times the minimum wage could be required to sign such an agreement.

      Employees would be given a 10 day review period, and the non-compete agreement would have to include a statement that informs them that not all non-competes are enforceable, that employees earning less than the statutory minimum (3x or 5x the minimum wage) cannot be made to sign a non-compete, that they may contact the Attorney General if they believe they are being asked to sign an illegal non-compete, and that they have the right to seek legal counsel before signing a non-compete. Any non-compete would have to be stipulated in an agreement separate from any other agreement or writing.

      The law would also clarify that continuing employment alone is insufficient consideration for a non-compete. Also, an employee quitting for good cause attributable to the employer would not be subject to the non-compete agreement, and Connecticut would become the sole forum for any non-compete related disputes.

     It would also ban agreements restricting the right to solicit customers and employees for periods greater than one year, by bringing them into coverage under the new law.

      Further, exclusivity agreements banning an employee from working for others or as an independent contractor while still employed by the employer would be outlawed, unless the person is an exempt employee earning the statutory amounts (3x and 5x the minimum rate), or the employee’s engagement in other work would imperil the worker’s safety, the safety of co-workers, or the public, or would substantially interfere with reasonable and normal scheduling expectations.

      Aside from the right of the Attorney General to file in the Superior Court, employees could file directly. Relief includes actual damages, or a $5,000 penalty, whichever is greater, plus attorneys’ fees and costs.

      Salary Range Disclosure

      Connecticut already requires employers to provide the salary range to applicants for the job applied for, and to employees for their job. 31-40z. The legislature is now considering expanding the scope of disclosure by requiring employers to disclose salary ranges in all public and internal job postings. HB 6273. These steps are being pursued in order to decrease the gender wage gap.

      Paid Sick Leave

     Under current Connecticut law, certain non-exempt service workers are covered by a paid sick leave law, if they work for an employer with 50 or more employees. Recently proposed legislation would greatly expand such coverage requiring all employers with 11 or more employees to provide 40 hours of paid sick leave each year to all employees. Employers with 10 or less employees would have to provide 40 hours of job protected, unpaid sick time. Gov Bill 6668.

      Full-time, part-time and temporary employees would accrue 1 hour of sick time for each 30 hours worked to a maximum of 40 hours per year. Employers with fewer than 11 employees who already provide paid sick leave could offset the 40 hours required under the law by the amount of paid sick leave provided. Employers with at least 11 employees could also offset the requirements of the law with any already provided paid leave, provided such leave policy permits accruals and usage as outlined in the law.

      If passed, the law will take effect January 1, 2024.