AN ACT CONCERNING THE USE OF FISCAL INTERMEDIARIES BY STATE AGENCIES FOR PAYROLL SERVICES.

Elections Labor Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Government Administration and Elections Committee
Last action: 2026-03-13
Official status: Public Hearing 03/18
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Rules for Payroll Services Contracts

This act requires state agencies to include financial penalties in contracts with fiscal intermediaries if the intermediary fails to process payroll on time.

What This Bill Does

Defines 'state agency' and 'fiscal intermediary'.
Requires state agencies to ensure that contracts with fiscal intermediaries for payroll services have a clause about timely wage payments.
Specifies that financial penalties must be included in these contracts if the intermediary fails to process payroll on time.
Sets the penalty amount at fifty percent of the unpaid wages.
Allows the Attorney General to sue the intermediary if they do not pay the penalty.

Who It Names or Affects

State agencies that use fiscal intermediaries for payroll services
Fiscal intermediaries who contract with state agencies

Terms To Know

state agency: A department, board, council, commission, institution or other executive branch agency.
fiscal intermediary: An organization that contracts with a state agency to provide payroll, taxes, or administrative services for the state agency.

Limits and Unknowns

The bill does not specify what happens if the penalty is not paid.
It is unclear how this will affect fiscal intermediaries' operations and costs.

Bill History

2026-03-13 Connecticut General Assembly
Public Hearing 03/18
2026-03-12 Connecticut General Assembly
Referred to Joint Committee on Government Administration and Elections

Official Summary Text

To require state agency contracts with fiscal intermediaries for payroll services to provide for financial penalties in the event that the fiscal intermediary fails to timely process payroll.

Current Bill Text

Read the full stored bill text

LCO No. 3044 1 of 2

General Assembly Raised Bill No. 487
February Session, 2026 LCO No. 3044

Referred to Committee on GOVERNMENT ADMINISTRATION
AND ELECTIONS

Introduced by:
(GAE)

AN ACT CONCERNING THE USE OF FISCAL INTERMEDIARIES BY
STATE AGENCIES FOR PAYROLL SERVICES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (NEW) (Effective October 1, 2026) (a) As used in this section, 1
"state agency" means a department, board, council, commission, 2
institution or other executive branch agency and "fiscal intermediary" 3
means an organization that contracts with a state agency to provide 4
payroll, taxes or administrative services for the state agency. 5
(b) On and after October 1, 2026, any state agency that enters into, 6
amends or renew s a contract with a fiscal intermediary that includes 7
payroll services shall ensure that such contract requires wages to be paid 8
in a timely manner and includes a provision imposing financial 9
penalties to be paid by the fiscal intermediary to the state agency in the 10
event the fiscal intermediary fails to process payroll within the 11
timeframe set forth in such contract . Any such contract shall provide 12
that such penalty shall be in an amount equivalent to fifty per cent of 13
the value of the unpaid wages. 14

Raised Bill No. 487

LCO No. 3044 2 of 2

(c) The applicable state agency shall impose any penalty required 15
under this section and if the fiscal intermediary fails to pay such penalty, 16
the Attorney General, upon complaint of the state agency, may bring an 17
action in the Superior Court to recover such penalty. 18
This act shall take effect as follows and shall amend the following
sections:

Section 1 October 1, 2026 New section

Statement of Purpose:
To require state agency contracts with fiscal intermediaries for payroll
services to provide for financial penalties in the event that the fiscal
intermediary fails to timely process payroll.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]