Connecticut Comptroller Pushes for Power to Freeze Payments to Contractors Under Wage Theft Investigation

State Comptroller Sean Scanlon is urging Connecticut lawmakers to grant his office authority to halt payments to contractors accused of violating prevailing wage laws on state-funded projects, according to remarks he made during a Tuesday news conference.

Senate Bill 268, introduced by the legislature’s Labor and Public Employees Committee and co-sponsored by Rep. Nicholas Menapace (D-Niantic), would give Scanlon discretion to pause contractor payments after the state Department of Labor notifies his office of wage law violation investigations.

Under the proposed legislation, payments could be stopped 10 business days after notice and would remain frozen until investigations conclude and any penalties or settlements are resolved, according to the bill’s provisions.

“If a state contractor is short-changing workers, we shouldn’t be sending taxpayer dollars to those projects,” Scanlon said during the news conference, which included labor representatives and state legislators.

The comptroller described the measure as a deterrent against “wage theft,” which includes failing to pay legally required wages on public works projects, according to his statements.

A similar proposal cleared the Labor and Public Employees Committee last year but failed to gain final passage in the House, according to Scanlon. He said he has continued working with labor groups to refine the proposal and build support during this legislative session.

Sen. Julie Kushner (D-Danbury), co-chair of the Labor and Public Employees Committee, said the bill would push prime contractors to more closely vet subcontractors. She argued that contractors should be held responsible when subcontractors they hire violate wage laws.

Rep. Manny Sanchez (D-New Britain), the committee’s other co-chair, said stronger enforcement mechanisms are needed to ensure workers receive proper compensation.

Labor organizations have rallied behind the proposal. State Building Trades Council President Keith Brothers said the bill would strengthen coordination and enforcement efforts. Executive Director Joe Toner said wage theft is too often treated as a routine cost of doing business.

The legislation faces opposition from business groups, which have previously raised concerns about due process and cash-flow disruptions if payments are withheld before investigations conclude, according to supporters of the bill. However, backers argue the measure balances these concerns by providing contractors with notice and tying payment holds to investigation outcomes.

Connecticut’s prevailing wage laws require contractors on state-funded projects to pay workers wages that meet or exceed locally established standards. The laws aim to prevent contractors from undercutting competitors by paying below-market wages on public projects.

The proposed payment freeze mechanism would create a new enforcement tool for the comptroller’s office, which currently processes payments to state contractors but lacks authority to halt them based on labor law violations.

Scanlon said he plans to continue working with lawmakers and the Labor Department to advance the measure during the current legislative session. The bill remains under consideration by the Labor and Public Employees Committee.

The comptroller’s office oversees billions of dollars in state payments annually, including contracts for construction, services, and other government operations. The proposed legislation would specifically target contractors working on state-funded projects where prevailing wage requirements apply.

If enacted, Connecticut would join other states that have implemented similar mechanisms allowing government officials to withhold payments from contractors under investigation for wage violations.