‘Hero’ pay gets caught in debate over who owes state’s essential workers
More than 134,000 caregivers, supermarket employees and other essential workers are caught in a three-way debate, waiting to learn next week if they’ll receive the full $1,000 bonuses state officials advertised last summer for staffing vital services when COVID-19 first struck Connecticut.
After agreeing to boost funds for “Premium Pay” — but still only enough to cover 70 percent of bonus costs — Gov. Ned Lamont says the state has done its share. Now the governor wants more private employers to step up.
But the business community says it’s already doled out more raises and bonuses than it can afford trying to counter staffing shortages and a rising minimum wage.
Meanwhile, the state’s largest labor coalition says that while both the public and private sectors owe these heroes, the state not only launched the program but is sitting on piles of cash that could cover the bill almost 30 times over.
‘Lead by example’
“The governor should lead by example. The $1,000 is the least we do,” Ed Hawthorne, president of the labor coalition’s Connecticut chapter, said. “They were made ‘essential’ by his pen. He should sign the [bonus] checks with the same pen.”
Hawthorne is referring to the health care, food service and other vital industries that Lamont exempted — via executive order — from closure immediately after the pandemic struck Connecticut in March 2020.
The implication of that order, Hawthorne said, was clear: These employees were expected to risk their safety, and that of their families, for the greater good. And because of that order, many employers ordered staff to work overtime shifts week after week or, in some cases, for months.
Since then, Lamont and lawmakers have struggled to find consensus on how to reward these workers, whom they often call “heroes.”
After rejecting a very expensive $750 million proposal that featured $2,000 bonuses for public- and private-sector workers, Lamont and top lawmakers settled on a plan just for the private-sector that became known as “Premium Pay.”
The state advertised $1,000 bonuses for full-timers who earned less than $100,000 per year; payments ranging from $800 to $200 for those making between $100,000 and $150,000 annually; and $500 for essential part-timers.
But officials only budgeted $30 million — far below all indications of demand — and stipulated all grants would be proportionally reduced if funding proved insufficient.
More than 134,000 applications were approved, and all grants would need to be reduced by 77 percent to fit within the $30 million budgeted. That means someone who qualified for $1,000 would get $232.67. A $200 bonus would become $46.53.
The state comptroller’s office estimates it would cost an extra $100 million to eliminate prorating and provide full bonuses. But Lamont would agree last week only to add $60 million. The General Assembly is expected to vote in a special session next week on the extra funding, with bonus checks due to go out in January.
But even as Premium Pay discounts were announced last week, Lamont projected a whopping $2.85 billion surplus — equal to about one eighth of the state’s entire General Fund.
Why can’t the state forfeit $100 million, 4 percent of that surplus, to reward its “heroes?” Hawthorne asked. “This is not a question of affordability. It’s a question of priorities.”
Businesses’ responsibility
The governor wants as much surplus as possible used to pay down the state’s massive unfunded obligations, which were accumulated across decades and currently stand at $88 billion.
And he’s also made it clear that he believes employers share the responsibility to reward private-sector workers.
In his February 2022 State of the State Address, Lamont — who would propose a wide array of tax cuts and go on to approve relief worth more than $650 million — said, “I hope employers in the private sector follow our lead in providing hazard pay bonuses to our amazing frontline workers.”
Lamont’s budget spokesman, Chris Collibee, added Tuesday that the state also has expanded access — in the public and private sectors — to COVID-19 tests, protective gear and vaccines, while also making unprecedented investments in workforce development to fight unemployment.
But while the administration says the state has done its part, the state’s largest business coalition says employers have as well.
Many companies have raised wages and offered bonuses as they grapple with the widespread worker shortages that have cropped up since the pandemic began, said Connecticut Business and Industry Association President and CEO Chris DiPentima.
DiPentima noted that Lamont and lawmakers still have more than $100 million in unallocated federal pandemic relief that Congress provided through the American Rescue Plan Act.