Connecticut SB 515: AN ACT CONCERNING THE CONNECTICUT WORKFORCE AND A PRODUCTIVITY GAP SURCHARGE.

Bill Text

LCO 3381 
 
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General Assembly  
Raised Bill No. 515  
February Session, 2026 
 
LCO No. 3381 
 
 
Referred   to   Committee   on   FINANCE,   REVENUE   AND 
BONDING  
 
 
Introduced by:  
(FIN)  
 
 
 
AN ACT CONCERNING THE CONNECTICUT WORKFORCE AND A 
PRODUCTIVITY GAP SURCHARGE.  
Be  it  enacted  by  the  Senate  and  House  of  Representatives  in  General 
Assembly convened: 
 
Section 1. (Effective from passage) (a) As used in this section: 1 
(1)  "Augmented  productivity"  means  the  portion  of  gross  revenue 2 
that exceeds an employer's three-year historical average, provided such 3 
increase is achieved through the integration of collaborative technology 4 
while maintaining a stable workforce; 5 
(2)  "Collaborative  technology"  means  any  hardware,  software  or 6 
algorithmic  system,  including  artificial  intelligence,  designed  to  be 7 
operated  by  or  to  assist  an  employee  in  the  performance  of  such 8 
employee's  duties,  where  the  technology  serves  as  a  multiplier  of  the 9 
employee's   individual   productivity   rather   than   as   a   stand-alone 10 
replacement of the employee; 11 
(3) "Productivity gap" means the measurable increase in revenue-per-12 
employee  hours  that  occurs  when  Connecticut  payroll  is  reduced 13 

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materially while gross revenue remains stable or increases; and 14 
(4)  "Stable  workforce"  means  a  Connecticut-domiciled  workforce 15 
where  the  total  headcount  and  aggregate  payroll  expenses  for  such 16 
workforce  remain  at  or  above  ninety-five  per  cent  of  the  three-year 17 
historical average of the employer. 18 
(b)  (1)  Not  later  than  January  1,  2027,  the  Secretary  of  the  Office  of 19 
Policy  and  Management  shall,  in  consultation  with  the  Commissioner 20 
of Revenue Services, the Labor Commissioner and the Chief Workforce 21 
Officer,  submit  an  implementation  plan  to  the  General  Assembly,  in 22 
accordance with the provisions of section 11-4a of the general statutes, 23 
to  ensure  that  technological  advancements  serve  to  augment  worker 24 
capability rather than render it obsolete and productivity gains lead to 25 
a more skilled workforce, by establishing (A) a mechanism to reinvest 26 
capital   when   business   output   and   labor   costs   become   materially 27 
decoupled, (B) steps to be actively taken by the state to minimize such 28 
decoupling by fostering collaborative productivity models that increase 29 
output  without  a  corresponding  decline  in  the  workforce,  and  (C)  a 30 
workforce and productivity gap contribution from employers. 31 
(2)  The  workforce  and  productivity  gap  contribution  plan  shall 32 
include: 33 
(A) A formula for a surcharge to be assessed annually for each income 34 
or  taxable  year  in  which  an  employer  maintains  a  productivity  gap. 35 
Such  surcharge  shall  reflect  the  financial  delta  between  an  employer's 36 
baseline  productivity  levels  and  its  reduced  payroll  expenses  for  the 37 
applicable income or taxable year, and shall be structured to ensure that 38 
efficiency  gains  realized  through  the  displacement  of  employees  are 39 
recaptured  by  the  state  on  an  ongoing  basis  to  mitigate  the  resulting 40 
economic impact;  41 
(B) An augmented productivity tax exemption that ensures that any 42 
augmented  productivity  achieved  by  an  employer  is  permanently 43 
exempt from taxation by the state; 44 

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(C)  Administrative  procedures  for  the  reporting  and  collection  of 45 
such surcharge, based on Connecticut-specific payroll and tax data; and  46 
(D) The establishment of a workforce and economic stability account, 47 
in which the surcharges collected shall be deposited and shall be used 48 
exclusively   for   the   purposes   of   workforce   retraining,   technical 49 
education and career transition programs for displaced employees. 50 
(c) If the General Assembly does not enact, prior to July 1, 2027, the 51 
implementation  plan  submitted  pursuant  to  subsection  (b)  of  this 52 
section,  notwithstanding  the  provisions  of  sections  4-168  to  4-172, 53 
inclusive, of the general statutes, the Secretary of the Office of Policy and 54 
Management  shall  issue  policies  and  procedures  to  implement  the 55 
provisions  of  such  plan.  The  secretary  shall  post  such  policies  and 56 
procedures  on  said  office's  Internet  web  site  and  submit  such  policies 57 
and   procedures   to   the   Secretary   of   the  State   for   posting  on   the 58 
eRegulations System, at least fifteen days prior to the effective date of 59 
such  policies  and  procedures.  Any  such  policies  and  procedures  shall 60 
no longer be effective upon the adoption of such policy or procedure as 61 
a final regulation in accordance with the provisions of