The renowned Cubs broadcaster’s catchphrase was “Holy Cow!” And that phrase was stuck in my head for the weekend.
Why? Because each time I read the guidance, there’s something new and big that jumps off the page to show that this law is going to have a broad impact on many employers that will be caught off guard with it. Because the guidance is overwhelming, I’m going to write a few posts about some key aspects of the guidance this week. Today’s post focuses on manufacturers because it turns out Not All Manufacturers Are Exempt From the Law After all
Indeed, when the new law was passed, manufacturers took great solace in the language of the statute which appeared to exempt all manufacturers from coverage. The language of the statute exempts, “Any business establishment classified in sector 31, 32 or 33 in the North American Industrial Classification System.”
But not so fast says that the Connecticut Department of Labor. While manufacturers in “general” may be exempt, there are some exceptions which relate to the use of the word “establishment”.
It turns out that when the NAICS refers to one facility as an “establishment”, it generally means a “single physical location”. It typically refers to an entire company as an “enterprise.”
This makes a difference, according to the CTDOL. “Each ‘establishment’ should be assessed separately to determine if the primary business activity falls within sector 31, 32 or 33. That means that an employer may have one facility subject to the law and other facilities that are not.”
The Guidance suggests that a manufacturing establishment in Town A may be exempt, while its distribution center in Town B may be subject to the law.
Confused yet? Well the guidance goes further. If a manufacturer has a two or more buildings in a “campus” type setting (typically at one address), such campus shall be considered one physical location. If the primary activity of that campus is manufacturing, then all of the campus will be exempt from this law.”
So, for employers in Connecticut who do manufacturing, the two main issues that they will need to figure out is:
1) If they have a campus, is “manufacturing” the primary activity of the campus? If so, then the entire campus is exempt.
2) If they have various facilities around the state, only those that do primarily manufacturing will be exempt. Corporate offices (apart from the manufacturing facilitiy) or other support centers will not be exempt.
Thus, if you were a manufacturer and thought that your entire company was exempt from the law in Connecticut, think again. This new guidance suggests a level of analysis that may alter that equation.