From Lawyer to Employer: Season 4, Episode 11 | Connecticut's New Employment Laws: What Employers Need to Do Before October 1

Sarah Niemiroski: Yes. Yeah, there were two big laws. I feel like at the close of every legislative session, each year we get something new and something big that, impacts pretty much all employers in Connecticut.

I think last year was the paid sick leave changes, which was pretty significant to our public sector employers. Here, these ones, the two big ones, will impact pretty much all employers. So the first bill is House Bill 5003. It's an omniforce workforce bill called An Act Concerning Workforce Development and Working Conditions in Connecticut.

It is one of the most ambitious workforce packages Connecticut has seen in recent years. And the second is Senate Bill 5, the Connecticut Artificial Intelligence Responsibility and Transparency Act. It was enacted under the title An Act Concerning Online Safety, and is now widely being called the CART Act.

It's a wide-ranging artificial intelligence and online safety law that hits hiring and employers directly. And, both of these bills they're now laws, not just proposals. Governor Lamont signed HB 5003 on May 11, and it became Public Act 26-12, while Senate Bill 5 became Public Act 26-15 in early June of this year.

Dan Schwartz: And so big-picture timing message for employers?

Sarah Niemiroski: Most of these effects go into...or most of the provisions go into effect on October 1, 2026, so the time to start planning is now. It's only about three months away...believe it or not.

Dan Schwartz: Summer is going to go by quickly, I have a feeling. It always does when it comes to workplace laws, which is why we wanted to put this out now. So all right, let's start with the first bill, the omnibus workforce bill here. There were a couple of different provisions here. I wanna start with wage transparency. Because Connecticut has had some rules here, but what's changing?

Sarah Niemiroski: Connecticut's wage transparency law is getting a pretty big overhaul. Some of you who are listening may be familiar with the fact that the law previously required employers to disclose the wage range when an applicant requested or when an offer was made to that applicant. But now Connecticut joins other states like California, Colorado, and New York in requiring that wage range to be posted right in the job advertisement.

So when you're scrolling LinkedIn, now you're gonna be able to see, okay, this position for this wage range. This goes into effect October 1, 2026. Now every internal posting too, not just external postings, every internal and external posting has to list the position's wage range as well as a general description of benefits.

So that includes things like health insurance, retirement, fringe benefits, paid leave, other non-wage compensation. There are two nuances to be aware of. So the range has to be set in good faith. So you can't just go on and say, "Okay the wage range is ten thousand dollars to a hundred thousand dollars."

It needs to be a legitimate reflection of the expected wage range. And the benefits description has to come at the same time as the range, not later. Also to flag, this law covers roles performed both in Connecticut and out-of-state roles where the employee reports to a Connecticut supervisor, office, or work site.

So if you're a Connecticut employer, and you have remote employees, those remote positions would be covered by this law.

Dan Schwartz: And what about enforcement and penalties associated with that?

Sarah Niemiroski: The laws now significantly expands anti-retaliation protections. Now you are prohibited from refusing to interview, hire, or promote or terminating anyone for exercising these expanded rights.

It does remove punitive damages from the law, but it extends the statute of limitations from one year to two years.

Dan Schwartz: All right, so let's focus on a practical aspect for employers. What should employers do before this law goes into effect?

Sarah Niemiroski: So a few things. One, you should be sure to update your job posting templates and train recruiters not to discuss compensation before providing the required disclosures.

Practically, if you post on Indeed, LinkedIn, or, your careers page, each posting will now need to have that salary range as discussed, say, $65,000 - $80,000 plus a benefits summary. And this includes internal postings for promotions or lateral moves.

Even a recruiter cold calling a passive candidate can't talk compensation until that wage range and benefits description have been provided so that will need to be built into outreach scripts.

Dan Schwartz: All right. That's a pretty big change, but it's not the only one in this bill. So one of the other ones that has been a...I think a topic of conversation is the sort of notion that employers recouping some training costs here and the legislature really pushing back. So there's now a sort of increased scope of a ban on employee promissory notes. What's that all about?

Sarah Niemiroski: So this hits employers that have something known as training repayment agreements, sometimes called TRAPs.

Connecticut's already banned these for employers with 26 or more employees, but the law now removes that size threshold entirely. So now no employer, no small employer, for example, can have this. For agreements executed after October 1, 2026 the prohibition applies to every employer regardless of headcount.

So audit your onboarding documents, training agreements, and retention bonus structures now. One small note for the public sector employers listening in, actually private sector too, if you have a collective bargaining agreement in place that has something like these employment promissory notes, say you're gonna pay for an employee's CDL if they stay employed for, a year or two, what-whatever the term of the collective bargaining agreement is, that actually controls over this law. It is a small but mighty exemption.

Dan Schwartz: Yeah, and I think the other thing to keep in mind is try to distinguish those types of agreements from retention bonuses as well, or, true signing bonuses. I think those have to really now be distinguished from these sort of training repayment ones.

All right, let's keep going 'cause I know we've got a lot to get through here. Lactation accommodations. This was not necessarily on people's radar, but there have been some changes made here too, right?

Sarah Niemiroski: There has. The existing law moves from permissive to mandatory language for the employer. So before it was a may, now it's a shall.

Employers now shall provide reasonable break times for an employee to express milk or breastfeed on-site, and those breaks have to be in addition to regularly scheduled breaks, not in lieu of. And you have to make reasonable efforts to provide a private room not a toilet stall, that's free from intrusion, shielded from the public, near a refrigerator or portable cold storage, a little bit of a tongue twister there and with an electrical outlet.

Anti-retaliation protections do apply, and it covers any employer with one or more employees. So pretty much everyone out there.

Dan Schwartz: So as a practical matter I would suspect employers need to revisit some of their practices here, maybe look at their facilities that they have?

Sarah Niemiroski: That is right. You should really be walking through your facilities and asking yourself, does the lactation space have a lock?

Is there a mini fridge nearby or a cooler, an accessible outlet? A converted conference room could work. A bathroom stall or open cubicle certainly does not. For field workers or mobile employees or those with multi-site operations you could consider portable privacy screens and portable cold storage so you're compliant at every location.

But these are the questions that you're gonna need to be thinking about as we approach October 1st.

Dan Schwartz: Yeah, good point, and, some employers will obviously need to really rethink it. The level of compliance in that area somewhat depends on whether employers have had an employee who has recently given birth or not, and once they do, some employers are in for a little bit of a surprise as to some of the obligations.

One of the other interesting things that I saw that I think is pretty unusual nationwide is this new ADA accommodation notice. Let's walk through this one.

Sarah Niemiroski: So this is unusual, but I think it should be simple to digest. Employers now have to provide a written notice of the right to reasonable accommodations under the ADA to three groups of people: new employees at the start of employment, existing employees within 120 days of October 1st which would be January 29th, 2027. It's worth calendaring.

And any employee who notifies you of a disability within ten days of that notice, you need to provide them the ADA notice. You'll be able to comply by displaying the Labor Commissioner's Poster in a conspicuous, accessible spot, though I will note I don't know that the Department of Labor has actually put out that poster yet.

So we're gonna k- keep our eyes open for when that notice goes live.

Dan Schwartz: Yeah. So as a practical matter, if you've given it to employees when they're hired and also given it to your existing employees as well, does that solve the issue, or does it still require an additional notice to an employee who's, who notifies you of a disability?

Sarah Niemiroski: Yep. You will now have this ten-day clock that will come into play. So if an employee discloses a disability, whether that's through HR, a doctor's note, or a conversation with a manager, you as the employer will then have ten days to provide the written notice. So you're gonna need to train your managers to flag disclosures to HR immediately, 'cause ten days can go by in a blink of an eye.

Dan Schwartz: For sure. And a lot of times these types of requests don't come in a sort of formal way. Sometimes it's an informal comment that an employee makes about having a tough time and needing some help. They may not use the words, quote, "reasonable accommodation." So something for employers to flag and certainly provide some training to people on.

All right, let's keep walking through this as we've- as you start to pull this together, you start seeing how it all adds up. Here's another one, a pay stub transparency for large employers. All right, how large do employers need to be, and what's required?

Sarah Niemiroski: So if you have 100 or more employees, you are now subject to this provision of the act.

You, as a large employer, will have to create and publish a guide to your pay codes for overtime and commonly used differentials: shift, on-call, hazard, callback pay, holiday pay, weekend, and geographical. The guide will need at least 10 codes if they exist. Now, you don't have to go out and create pay codes that don't currently exist and that you're not using them.

But if they do exist, they will need to be a part of this guide, and the guide should be posted, or will have to be posted rather, on your website in both English, Spanish, and any other common languages employees speak. So that'll also include a contact for disputes about the, the pay codes. And you'll have to give employees the web address at hire and on each pay record, though no one has to build a website or create new codes just to comply.

Employers using third-party payroll service that provides an adequate guide will be deemed compliant.

Dan Schwartz: All right, so as a practical first step, what can employers do when they're trying to get their arms around this?

Sarah Niemiroski: So you're gonna wanna call your payroll vendor, ADP, Munis, Paychex, whoever, and ask whether they'll provide the compliant guide.

If they do, you'll probably be deemed compliant, but confirm it covers that multilingual requirement and names your contact person. And if your subs use codes like OT1, SD2, or HOL with no ex-explanation, that's what this is targeting, and the guide needs to be able to co-decode at least 10 of them. So it's essentially, if you're an employee, now the goal is that you'll be able to understand your paycheck when you get it.

Dan Schwartz: All right, I'm not gonna ask what SD2 is. I think it might be shift differential, but,

Sarah Niemiroski: For the second shift...

Dan Schwartz: or the second shift. Yes, for the second shift, for sure. Look, there are two others that we really don't have time in this podcast to get into, but just wanna flag one of them is a successor employer obligations.

That one's gonna go into effect next year on July 1st, 2027. So we'll save that one for a future podcast as well. And then the last piece of information on that bill, I think, is construction. So are there a couple of points that those in the contracting industry should know?

Sarah Niemiroski: Yeah, there are. So general contractors entering construction contracts on or after January 1st, not October 1st, January 1st, will be jointly and severally liable for unpaid wages owed to their subcontractor's employees.

Workers can sue the subcontractor, the contractor, or both with at least 30 days before notice, and you can't get around this. Provisions that waive or release the liability are completely unenforceable. So you're gonna need to revisit your subcontractor agreements, tighten your due diligence on payroll compliance, and make sure your indemnification clauses account for this new joint liability.

Dan Schwartz: And is there anything on the public work side in the bill?

Sarah Niemiroski: Yeah. There's a new daily record-keeping requirement on public works projects. Daily records of every mechanic, laborer, and worker at the site, including their name, trade license number, and arrival and departure times. Failure to file this record would be a Class C misdemeanor or a fine up to $500, up to three months imprisonment, or both.

Dan Schwartz: All right. So that's just one bill. Certainly had a lot packed into it. We have some more information up on our website. We'll make sure to link to it in the comments below. But I wanna switch gears almost entirely and go to this AI Responsibility and Transparency Act as well, because there are a number of features in there that I think are gonna hit employers.

So can you give us sort of an overview of the law and where this stands for employers?

Sarah Niemiroski: Yeah. So at its core, it regulates what's known as automated employment-related decision technology or AEDT. Broadly, that's any technology that processes personal data and produces an output like a score, a rank, a recommendation, or classification that would be used as a substantial factor in or materially influences an employment decision.

That sweeps in a lot of everyday HR tools, so resume screeners, assessment platforms, candidate ranking software, scheduling algorithms, performance analytics. For employers this law does four big things. One, it sets disclosure and pre-decision notice requirements. Two, it clarifies that using these tools is not a defense to a discrimination claim.

Three, it creates a whistleblower-style protection for certain high-end AI developers. And four, it adds an AI-related disclosure to warn notices filed with the Connecticut DOL.

Dan Schwartz: All right. So let's now walk through some of these features here. The disclosure and pre-decision notice rules, walk me through a couple of those and when they go into effect.

Sarah Niemiroski: So beginning October 1, 2027, if you deploy a tool that interacts with applicants or employees, you have to tell them in plain language that they're interacting with this technology, unless a reasonable person would find it obvious. Good news on scope. Routine business software like word processing, spreadsheets, email, basic data storage is excluded.

That's not the target of this. When the tool is a substantial factor in a decision, you'll have to give a written pre-decision notice identifying that an automated tool is being used, its purpose and the type of decision, the trade name, the categories and sources of personal data analyzed and how it's assessed, as well as your contact information.

There is a trade secret safe harbor, but if you withhold on that basis, you have to say what's withheld and why.

Dan Schwartz: Yeah. So that's kinda like the background check pre-decision notices, right? That some employers use. I think that's the notion here that if you're gonna use it, you've gotta let people know, right?

Sarah Niemiroski: Yes, exactly. That is... a great comparator.

Dan Schwartz: So what about tools we license from vendors? What about those?

Sarah Niemiroski: For third-party systems, the statute puts duties on developers to give the deployer, you the employer, the information you need to comply. The developer and the deployer can contract for the developer to assume the notice duties, but that allocation has to be explicit.

So review your vendor contracts now. Does your provider have to give you the trade name, data categories, and assessment tech that you'll need? If not, you're gonna need to negotiate that in before October 2027.

Dan Schwartz: Yeah. The way I've been thinking about it is if you use sort of an AI-powered applicant tracking system that screens resumes and ranks candidates, you'll need to simply disclose that to applicants that they're interacting with.

And, similarly, if you use a chatbot to schedule interviews or answer FAQs and it feels like a human, you really do need to tell candidates upfront that it's automated. You also mentioned AI isn't a defense to discrimination. How big a deal is that?

Sarah Niemiroski: That's really the big headline here for HR and employment counsel.

The statute makes it clear that using an automated tool isn't a defense to discrimination claim. Really, what this means is that you're encouraged to validate tools before and during deployment, document mitigation and keep a human in the loop for high-stakes decisions. But none of that creates a safe harbor.

Practically you're gonna need to get bias testing results, methodology summaries, and update cadences from your vendors, align internal audits to Connecticut's substantial factor standard, and the decisions in scope hiring, promotion, discipline, discharge, and terms and conditions of employment. Also, confirm the data sources and feature sets in your notice are accurate, and you don't inadvertently signal protected characteristics or processes or proxies.

But really what this means is, if you're making a decision based off of AI data, if your tool is for some reason or another, acting in a discriminatory manner, and it inadvertently discriminates against someone, you can't just say, "Okay, it was the tool." It is ... The onus is on you as the employer to ensure that the tool will not be doing that discriminatory vetting, that's really what we mean by the bias testing results.

Dan Schwartz: Yeah. So an employer can't just simply say the AI made me do it." Exactly. You really do need something more there. So I think really you gotta get behind the black box a little bit of the AI tool. All right, we're running out of time here, so I'm gonna just go through rapid fire on a couple of last issues here.

WARN Act change goes into effect October 1st. What do employers need to know on those WARN notices?

Sarah Niemiroski: So for those WARN notices, it ... what it really means is that if AI is used in any way to identify who's going to be laid off, that information needs to be included on the WARN notice submitted to the DOL.

Dan Schwartz: Okay.

There was also a frontier developer whistleblower protection. That's pretty niche, right?

Sarah Niemiroski: Oh, it's super niche. By January 1, 2027 large frontier developers must set up an anonymous internal reporting process for covered employees, give status updates on investigations, and elevate reports to officers and directors at least quarterly.

Plus, provide clear notice of the rights through postings, new hire notices, periodic notices to remote employers. Any Connecticut company operating or partnering on cutting-edge model training should review its non-retaliation policies, stand up an AI safety reporting channel, and verify broad-level reporting workflows.

So if-- what if an employee of these frontier developers basically is whistleblows that something is going wrong with the AI, we are now protected under Connecticut law.

Dan Schwartz: Yeah. And, presumably these frontier developers know who they are, but really from a name brand, it's gonna be things like your Claudes, your ChatGPTs, right?

And so key big dates on this AI bill, there are a couple I hear mentioned October 1st, January 1st and October 1st, 2027. What's with each of them?

Sarah Niemiroski: So October 1st, 2026 is the framework for the AEDT. The AI is not a defense amendment, the frontier developer whistleblower provisions, and the WARN AI disclosure notice.

That all goes into effect then. On January 1st, large frontier developers must have their anonymous reporting process in place, and by October 1st, 2027, the interactive disclosure and pre-decision notice obligations kick in.

Dan Schwartz: Yeah. So the things that we are still looking for, I think, obviously, we're waiting for the labor commissioner's poster. I expect that on or before really early next year or so. We'll see when we get it.

I think the other thing that at least I'm looking for is really how detailed this quote, general description of benefits needs to be on the wage range disclosures, on the wage transparency. So the wage law requires it, but doesn't really say how granular it needs to be.

So expect that to get a little bit of questions as well. And the other thing that at least I'm interested in is really where is this substantial factor? When do we know that these AI decision tools are really coming into play as well? So that'll be it from my side. Is there anything that you're on the lookout for, Sarah?

Sarah Niemiroski: I suppose I would just flag that, don't forget that we're talking all about Connecticut laws here, but the federal laws are still in place. On lactation especially, Connecticut's rules sit on top of the Federal Pump Act and the Pregnant Workers Fairness Act, so you're going to need to build your accommodation to satisfy both, not just state law.

Dan Schwartz: There's a lot that employers need to do both now and over the next year, so we're gonna keep tracking this both in our podcasts and also on our website. If you haven't signed up for an, our alerts or our blog posts, you can find them at shipmangoodwin.com or follow our blog at employmentlawletter.com.

We'll try to keep up with all the updates on there as well. So before we wrap up, though, I did promise the listeners a bit of an announcement at the end, so I've got a personal note. So as some of I've been hosting this show for a while now. I actually took over for one of my partners, Gabe Jiran, who ran season one, and there's always a time for transition, and I think now was a good time.

So I'm thrilled to share that my colleague Sarah will be stepping in as host of From Lawyer to Employer later this summer. And I think as you've heard on this podcast and on prior episodes of this podcast she really does bring a terrific insight into labor and employment issues, so I know you're in great hands.

And I'll still be around both behind the scenes and hopefully, Sarah, you'll have me as a visitor.

Sarah Niemiroski: Oh, absolutely. Thank you, Dan. These are gonna be some pretty big shoes to fill, but I'm excited to try and carry this podcast forward. For everyone who's listening thank you for being with us and making it through all these changes.

On behalf of both of us, we will see you next time.

Dan Schwartz: All right. That wraps up another episode of From Lawyer to Employer. If you can, please rate and review us on your favorite podcast website, we'd love that. And if you have any questions or comments, you can leave them there or reach out to either one of us.

I'm sure you can Google and find us at the Shipman & Goodwin website. Until then, have a great rest of the summer, and we'll see you back in the fall with Sarah. Take care.

Host: Thank you for joining us on this episode of From Lawyer to Employer: A Shipman Podcast. This podcast is produced and copyrighted by Shipman & Goodwin LLP, all rights reserved.

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