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Lawmakers might consider revamp of jobless benefits

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State lawmakers could take up a proposal next year that would make unemployment benefits more flexible and give companies additional options for cutting back on employee hours.

So-called "work-share" programs have been implemented in 21 states, and state Rep. Mary Ann Sullivan, D-Indianapolis, plans to introduce a bill for such a program in Indiana. Another Indiana House member, Ed DeLaney, D-Indianapolis, presented the concept Tuesday to the state’s Unemployment Insurance Oversight Committee.

The program would allow employers to avoid laying off workers by reducing their hours. Those employees would then receive a share of unemployment benefits proportionate to the reduction in hours.

For example, instead of laying off one worker and eliminating his 40 hours per week, a firm could cut 10 hours a week from four employees’ workloads. The state, in turn, would pay a smaller share of unemployment benefits to the four workers instead of paying full benefits to one worker who was laid off.

That helps companies, DeLaney said, because if demand for work resurges, firms can increase existing employees’ hours and avoid the costly process of hiring new workers. The concept has the initial backing of the Indiana Chamber of Commerce, an endorsement that could boost its chances in the Republican-controlled General Assembly next session.

It also would help workers, who could receive additional skills training while maintaining a job, DeLaney said.

“Is that going to get someone back to work faster? I don’t know,” DeLaney said. “But the employer doesn’t have to face hiring costs.”

Some legislators and industry lobbyists raised concerns about the policy.

Sen. Brent Waltz, R-Greenwood, said companies typically lay off the least experienced or productive members of the work force. A work-share plan would unfairly spread economic pain of reduced hours across more workers, including those who might be better qualified.

“The strongest, best employee and the weakest employee and all the people in between end up suffering equally,” said Waltz, who redistributed water among four glasses during the committee meeting to illustrate his point.

Waltz also said companies such as construction firms, where work flow typically varies by season, would benefit the most.

DeLaney, a lawyer whose firm handles some employment-law cases, said it’s not always the case that weakest workers are laid off. Instead, employers often eliminate workers that are older and more experienced because they are paid more.

Several important questions would have to be considered in crafting a work-share policy. Among them is how employers would reduce their benefit costs for employees working fewer hours, and how to build safeguards into the system so employers couldn’t abuse it.
 
Ed Roberts, a vice president with the Indiana Manufacturers Association, said creating an effective work-share program could take “hundreds of hours.”

He cautioned against moving too quickly, particularly since the Department of Workforce Development, which administers unemployment benefits, plans to overhaul its computer system at the end of the year.

Adding a new benefits-compensation system in the middle of that change could be overwhelming for the department, he said.

“This isn’t to say 'no,'” Roberts said. “This is to say 'slow.'”

Lawmakers will decide whether the proposal Sullivan intends to introduce will get a hearing in next year’s legislative session, which begins in January.

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  • I get it.
    no, i get it. and it does make sense. Too often we scream to those who know that they are in a seasonal position to save their nuts for winter. But for Business x who has a lull in orders the benifit of retaining semi trained employees, and reduce the liability of UI on the employer and state - well maybe not such a bad idea.
    Still heck yeah baby i want a 4 day week :)
  • It's Worth a Try
    Exploring a new option that is being tried in 21 other states seems worth the effort. There would need to be careful analysis of both employer and employee perceptions of the programs in other states, as well as an analysis of whether we have the infrastructure to effectively do this type of program. A provision requiring employers to keep existing employee benefits in place might be in order. Mr. Waltz, why the immediate negative response? Employers would not be REQUIRED to use this approach; it's merely another tool. Chris, this isn't likely to be a "gravy train" for the employee. Many laid-off persons are not highly paid to begin with and unemployment benefits are not a dollar-per-dollar replacement so this won't enable employees to live "high off the hog." There will still be some pain for many.
  • Not quite Chris
    I don't think that's quite the way it works Chris. It's not full pay for the time not worked. Typically UI benefits are at 50-60% of full pay. You don't seem to understand the proposal any better than Brent Waltz.
    • OH ME ME ME
      did i read this right "Those employees would then receive a share of unemployment benefits proportionate to the reduction in hours." Employees will get paid for reduction in hours? IF that is the case OH me first, Heck yeah, 3 and 2/3rds work week get paid for 5. THat is my DREAM baby. GOsh i just might vote democrat. THis is the best thing EVER!! go dems go dems.
      • Why re-invent the wheel
        At first look the positives seem to outweigh the negatives. And with 21 other states having already implemented some form of a "work share " program, surely we could find an existing program that has already addressed Sen. Waltz concern.
      • Don't Wait on DWD
        "Ed Roberts, a vice president with the Indiana Manufacturers Association, said creating an effective work-share program could take 'hundreds of hours.'”

        "He cautioned against moving too quickly, particularly since the Department of Workforce Development, which administers unemployment benefits, plans to overhaul its computer system at the end of the year.

        "Adding a new benefits-compensation system in the middle of that change could be overwhelming for the department, he said."
        -----------------------------------------------------
        You might as well say "Wait 'til kingdom come" for DWD's leadership to get its modernized computer system up and running; as for overwhelming DWD, that's an easy feat. DWD has been overwhelmed for years due to massive incompetence of its upper leadership.

        The modernization, set to be "completed" at the end of this year, was actually originally set to be completed in March 2008 at a base cost of $23.9 million. Now over 3 1/2 years overdue, the system cost overruns put the base price tag at over $42 million.

        So, Mr. Roberts, don't count on DWD getting this project done any time soon; if the legislature pushes this new format, it'll give DWD's commissioners yet another excuse to re-postpone the launch of the modernized system for what is, by now, at least the eighth time. And all along, DWD's error-ridden leadership has overpaid more money to claimants than any state in the country the last 5 years.
      • Don't Wait on DWD
        "Ed Roberts, a vice president with the Indiana Manufacturers Association, said creating an effective work-share program could take 'hundreds of hours.'”

        "He cautioned against moving too quickly, particularly since the Department of Workforce Development, which administers unemployment benefits, plans to overhaul its computer system at the end of the year.

        "Adding a new benefits-compensation system in the middle of that change could be overwhelming for the department, he said."
        -----------------------------------------------------
        You might as well say "Wait 'til kingdom come" for DWD to get its modernized computer system up and running; as for overwhelming DWD, that's an easy feat. DWD has been overwhelmed for years due to massive incompetence of its upper leadership.

        The modernization, set to be "completed" at the end of this year, was actually originally set to be completed in March 2008 at a base cost of $23.9 million. Now over 3 1/2 years overdue, the system cost overruns put the base price tag at over $42 million.

        So, Mr. Roberts, don't count on DWD getting this project done any time soon; if the legislature pushes this new format, it'll give DWD yet another excuse to re-postpone the launch of the modernized system for what is, by now, at least the eighth time. And all along, DWD's error-ridden leadership has overpaid more money to claimants than any state in the country the last 5 years.
      • Having your cake and eating it too
        That's just what we need: a more flexible way for employers to make more money and employees to make less, while still not being sufficiently free to look for another job.
      • This Really Smells
        This is giving employers an easy way to reduce paying benefits and still getting the same amount of work out of the employee. Hmm...lets see, cut everyone's hours by 10, reduce their benefits and make the employee still do their job to full capacity EXCEPT now with less pay and less/no benefits. Then, if they don't do the same job within less hours, lay them off completely. This smells of corporations lobbying and paying off politicians. What happened to representing me...you remember me don't you? The one who elected you?
      • Employers
        Lets make sure we dont inconvenience the companies that donate to the politicians.
        Working folks can just take a little less, they don't care as long as you tell them it's helping them with skills training.
        Why don't you do something to help the people who elected you for a change!

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