March 21, 2019

Report: New England employers still shouldering highest employee costs

The Hartford skyline

New England employers are still shelling out the nation's highest employee compensation packages, federal officials said Wednesday.

Total compensation costs for private sector employers in the six New England states averaged $40.80 per hour in December, the highest of all census divisions, according to the latest data from the U.S. Bureau of Labor Statistics (BLS). That's up slightly from $40.74 a year earlier.

For the month, wages and salaries in New England accounted for 68.4 percent of total compensation costs, or $27.91 per hour, and benefits made up 31.6 percent of costs, or $12.89 per hour.

Compensation costs for private employers nationwide averaged $34.05 per hour, with wages and salaries comprising 70 percent of costs ($23.85) and benefits rounding out the remaining 30 percent ($10.20).

In New England, benefits costs to employers were primarily driven by insurance ($3.34 per hour worked), paid leave ($3.25), including vacation, holiday, sick and personal leave, and legally required benefits ($3.02) such as Social Security and Medicare. Retirement and savings cost employers another $1.92 per hour.

Employer wages in Connecticut have become a hot-button issue over recent years as Democratic leadership continues to push legislation that would raise the state's minimum hourly wage from $10.10 to $15 over the coming years.

While major state employers like Hartford HealthCare and Middlesex Health are adopting their own $15-per-hour minimum wages, some businesses and lobbying groups have criticized the proposals as unfriendly to the private sector.

Meantime, other proposals in the legislature aim to implement a paid family and medical leave program, where employers would be able to take 12 weeks off from work with full compensation up to $1,000 a week -- or at 90 percent under Gov. Ned Lamont's proposal -- to care for themselves or a loved one. That program would be funded by a new 0.5 percent employee payroll tax levied no later than Oct. 2020.

Connecticut employers' stances on the proposed paid leave program vary depending on who you ask.

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