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December 4, 2013

Agency opposes limited unemployment plan

Governor says the proposal could be a source of problems.

INDIANAPOLIS – A coalition of business and labor groups want Indiana legislators to expand unemployment benefits to partially furloughed workers, but the proposal faces opposition from the state agency that would implement it.

So-called “work-sharing” programs, now in place in 26 states, allow employers facing financial problems to cut labor costs while sparing workers’ jobs. During a downturn, employers could cut back employees’ wages and hours, and those workers would eligible for partial unemployment benefits until the company regains its footing and returns them to full employment.

“As a state, our No. 1 focus is on jobs,” said Kevin Brinegar, president of the Indiana Chamber of Commerce. “Here’s a piece of legislation that would keep people from becoming unemployed and let them keep their jobs.”

Establishing a work-share program is on the chamber’s Top 10 list of priorities for the 2014 legislative session, which starts Jan. 6. Other supporters include the AFL-CIO of Indiana, the chamber’s traditional opponent on labor bills, and the liberal-leaning Indiana Institute for Working Families.

“We’re coalescing with organizations that we don’t normally do,” Brinegar said.

Similar legislation has been introduced over the past two years but failed to gain traction in the Republican-controlled Legislature. In 2012, the state’s Department of Workforce Development turned down a $2 million grant from the U.S. Labor Department to start a work-share program.

Under a typical work-share program, employers avoid mass layoffs by reducing their workers’ weekly pay and hours by 20 to 40 percent. In turn the state makes up some of the lost wages out of unemployment funds. A number of states adopted work-share programs after the 2008 recession to blunt the impact of stubbornly high unemployment rates.

In the states that have adopted work-sharing programs, the partial unemployment benefits last from 13 weeks up to a year.

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