Work-sharing arrangements proposal nets chamber backing

Indiana’s business community is getting behind a bill that would give businesses an alternative to laying off workers.

Kevin Brinegar, president and CEO of the Indiana Chamber of Commerce, testified in support of Senate Bill 347 during a Wednesday work session of the Senate Committee on Pensions and Labor.

The bill, sponsored by Assistant Majority Caucus Chairman Eric Bassler, R-Washington, would allow businesses to offer work-sharing arrangements instead of outright layoffs.

Through work-sharing, the affected employees would retain their key benefits, like insurance, but would only be paid a percentage of their regular wages. The portion of their wages cut would be covered by unemployment insurance.

“Let’s say their hours are reduced by 30%,” Brinegar said Thursday. “So, they’re getting 70% of their regular pay. They get 30% of the unemployment benefit that they would get if they were fully laid off.”

Additionally, because the worker is still employed, albeit partially, they would not need to fulfill the job search requirement that people receiving full unemployment benefits must perform.

To qualify, companies must have two or more employees on their payroll, and the individual must have worked for the business for at least 16 months. If those conditions are met, then the affected employee could receive 52 weeks of benefits.

Bringegar called it a “win-winwin” for all involved.

For the state, it reduces the amount of money taken from the unemployment insurance trust fund, and it keeps staffers with the Department of Workforce Development from conducting job search checks on recipients or providing services at a WorkOne Center.

He also noted a 2021 study by The Brooking Institution in Indiana that determined if a work-sharing program had been in place during the early stages of the COVID-19 pandemic that 34,000 Hoosiers would not have lost their jobs.

In addition, the federal government would have covered the partial unemployment benefits paid out under the work share program thanks to funding from the CARES Act.

“So, as a consequence, we lost out on well north of $100 million that would have gone into our trust fund and kept it more solvent ... we left money on the table,” Brinegar said.

According to the bill’s fiscal note, 27 states have implemented work-sharing programs through 2021. However, such arrangements “represent a very small portion” of the unemployment benefit payments.

The fiscal note also indicates if a work-sharing program is approved, the state could still qualify for more than $2 million in grant funding. A third of the grant would cover more than $680,000 of the $2.5 million estimated to implement the program.