Despite support from both Republicans and Democrats and no industry opposition, legislation to establish a work-share program in Indiana appears to be dead for the year.
The Senate Pensions and Labor Committee on Wednesday discussed Senate Bill 44, which would authorize the Indiana Department of Workforce Development to implement work sharing, but the chairman of the committee refused to vote on the bill. The committee will not meet again before the deadline to pass bills to the Senate floor.
Work share, sometimes called “short-term compensation,” allows employers to reduce the hours of workers instead of laying them off during an economic downtown. Those workers can receive partial unemployment payments while keeping their jobs and benefits.
Since 2011, a work-share bill has been filed every year, but it has never received a vote in either chamber.
Despite strong support from the business community, Republican Sen. Phil Boots, who chairs the committee, said he had concerns about creating a new government program when it’s uncertain how many companies would utilize it. He cited research that shows only 0.6% of companies in the 28 states with work share actually use the program.
“It’s not just a slam dunk issue,” Boots said.
Research from the Brookings Institution has shown that the usage rate can vary widely, though, and it often depends on how well the program is marketed to employers. In Missouri, for example, work-share claims make up about 9.5% of all unemployment claims.
Several other Republicans on the committee said they support the bill, which was authored by Sen. Eric Bassler, R-Washington.
“I think it’s a win, win, win, and we don’t see those too often in government programs,” Sen. Chip Perfect, R-Lawrenceburg, said.
Perfect said he doesn’t think it’s creating a new program, as Boots suggested. Instead, he sees it as modifying the existing unemployment system that the DWD oversees.
“To me, it seems like it’s a continuation of the work they’re already doing,” Perfect said.
No one from the public testified in opposition to the bill. The Indiana Manufacturers Association is neutral on the issue. DWD is also not taking a position on it.
Danielle Tucker, corporate counsel of labor and employment for Cummins Inc., said the company has used work share in several other states, including Arizona, Iowa, Wisconsin and Minnesota, as a way to save jobs and quickly adapt to ebbs and flows in the economy.
“Work share has been very beneficial to Cummins,” Tucker said.
Supporters of the legislation have urged lawmakers to pass the bill now while $100 million in federal funding from the CARES Act is available to pay benefits and cover some of the implementation costs.
According to a fiscal-impact analysis from the Legislative Services Agency, implementing a work-share program would cost DWD $2.5 million in the first year—$1.5 million in computer-system changes and $1 million in staffing costs. Ongoing costs would be $1 million annually, according to the analysis.
Josh Richardson, chief of staff for DWD, said Indiana would only receive $2 million of that $100 million and two-thirds of that would have to be used for marketing and outreach, while one-third could be used for implementation.
State Sen. Karen Tallian, D-Portage, said she thinks the state should act now to set up work share.
“Maybe it would take awhile to get a program up and running but there’s going to be another recession, and right now there is a lot of federal money available to do programs like this,” Tallian said. “Let’s use that money to set this up now so we can have it available and ready.”
But Boots said he didn’t think the state needed to take federal funding simply because it’s available.
“I’m not looking to expand anything that is not necessary,” Boots said.