Labor & Employment

This bill creates a new tax mechanism called a productivity gap surcharge that applies to Connecticut employers who significantly reduce their workforce payroll while maintaining or increasing their gross revenue. The law defines a productivity gap as occurring when an employer cuts payroll by more than 5% while keeping revenue stable or growing, and it specifically targets efficiency gains achieved through collaborative technology like AI that augments rather than replaces workers. Employers facing this gap would pay an annual surcharge calculated on the difference between their historical productivity levels and current reduced labor costs, while simultaneously receiving a permanent tax exemption on revenue generated through workforce augmentation. All surcharge funds collected must be deposited into a dedicated account used exclusively for workforce retraining, technical education, and career transition programs for displaced employees.

HB 5267 modifies Connecticut's workers' compensation law to clarify eligibility for incapacity benefits. It specifically prohibits employees who have elected to retire from receiving benefits if they later experience an injury or illness that causes incapacity. The key provision (Section 31-307(a), effective October 1, 2026) states that retirement eligibility eliminates future benefit claims for work-related incapacity. This directly affects workers who retire and then suffer work-related injuries, removing their access to weekly compensation payments under the current system.

SB 69 would eliminate Connecticut's Earned Income Tax Credit (EITC) by repealing the statute (section 12-704e) that created the program. This change would directly affect low-to-moderate income working individuals and families, particularly those with children, who currently qualify for the credit. The bill's key mechanism is the simple repeal of the existing law, removing the eligibility and calculation rules for the credit. As a result, qualifying residents would no longer receive this refundable tax credit, reducing their annual tax refund or increasing their tax liability. The bill does not create new provisions but removes the current program.