Work Share Continues to Get Cold Shoulder in Indiana

In December, the Chamber introduced the work share policy to the new chairman of the House Labor Committee, Heath VanNatter (R-Kokomo). He made no commitment to hear a bill but indicated that he would keep an open mind.

A work sharing program would allow employers to maintain a skilled stable workforce during temporary economic downturns. Employers then could reduce hours without layoffs, enabling workers to keep their jobs, which hopefully could be returned to full-time status once economic circumstances improve. Also part of the equation: unemployment compensation to partially compensate workers for their lost hours.

After several discussions with the Indiana Manufacturers Association (IMA), the Department of Workforce Development (DWD) and the Chamber, Rep. VanNatter decided to host a meeting with the three parties present. He later informed us that he was being told different things about the issue than what the Chamber was being told and wanted everyone in the room at the same time. Simply stated, the Chamber supports work share, but DWD and the IMA do not.

What Rep. VanNatter was able to do was get the IMA to admit in the Chamber’s presence that it was opposed to the bill. As a result, Rep. VanNatter didn’t feel that he could move forward with the two organizations in disagreement. In a subsequent discussion, he did say that he would like to study the issue (himself) this summer and then make up his own mind.

Over the course of the last five years, the bill has been heard twice but no vote has ever been taken. This is very frustrating for a measure that is a no-brainer and would garner bipartisan support – if it can ever make it to that point!

Misclassification of Workers and Cost of Surety Bonds Debated

The second meeting of the Interim Study Committee on Employment and Labor took place recently. Committee members discussed a proposal offered by Sen. Karen Tallian (D-Portage) that would address some concerns related to the misclassification of workers specific to the construction industry. Her proposal would create a payroll fraud task force that would identify those commercial and industrial construction projects in which payroll fraud or employee misclassification is suspected of occurring.

The task force would assess investigative and enforcement methods. Additionally, the group would supervise and direct an investigator hired by the Department of Labor (DOL) and assigned to the task force to conduct investigations and enforcement activities.

The task force would consist of the commissioners from the DOL, the Department of Workforce Development (DWD) and the Department of Revenue (DOR), plus the chair of the Worker’s Comp Board. A task force fund would be created as result of penalties and interest assessed against employers that would be used to administer the investigations. Most of the public did not have access to a copy of the proposal until after the hearing.

The DOL testified that there was already a mechanism for fraud. A web site hosted by the DOL allows for online reporting of any suspected misclassification of workers. The information gets forwarded to the DOR, DWD and the Worker’s Comp board; these agencies then handle each tip accordingly, with all information remaining confidential. It was estimated that there are two to four reports per month. Committee Chair Rep. Doug Gutwein (R-Francesville) did not allow the proposal to be included in the recommendation report of the committee. It is anticipated that Sen. Tallian will draft similar legislation in the upcoming legislative session.

The committee also heard testimony from the Surety & Fidelity Association of America (SFAA) on the pricing of surety bonds on public works projects. As a licensed rating or advisory organization for the states, SFAA develops a manual of rating rules for surety bonds that their members may adopt. Bond companies may either file the rates advised by SFAA or file their own. SFAA serves as the statistical agent in Indiana for reporting premium and loss data to the Department of Insurance. The premium for a bond is based upon the construction contract. The surety’s assessment must take into account the size and scope of the underlying obligation and is designed to prevent defaults on construction projects.

The cost of surety bonds on public work projects is generally between .5% and 3% of the amount of the construction contract. From 2001 to 2014 the surety industry collected $380 million in premiums and assumed a total exposure of about $38 billion. Approximately $85.4 million was incurred in direct losses on those bonds during the same period. Representative Bob Morris (R-Fort Wayne) suggested that Indiana might be able to self-insure on surety bonds and come out financially a little better. No action was taking on his suggestion.

State Plans First Indiana Sectors Summit

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The inaugural Indiana Sectors Summit, launching the Indiana Sector Partnership Initiative, will take place October 19-20. The purpose of the summit is to grow and expand sector partnerships across Indiana, as well as continue to explore how sector partnerships can be used as the vehicle to develop industry-driven career pathways.

Geared toward Indiana employers, the two-day event will include panels and breakout sessions around the topics of sector partnerships, pathways and work-and-learn. The summit will also include the annual Elevating Work & Learn in Indiana event and the Skill UP! Indiana Round 2 awards ceremony.

The Indiana Department of Workforce Development event will take place in Carmel. Find more information online.

The 2016 Legislative Session: Some Noteworthy Shots Made

Silhouette of Teen Boy Shooting a Basketball at Sunset, copy space

With the NCAA basketball tournament in full swing and baseball season just around the corner, slam dunks and grand slams are both center stage. Neither of those terms, however, can be used to describe the 2016 Indiana General Assembly session. We’ll have to settle for a solid jump shot or maybe a line drive double in the gap.

The number one priority for the Indiana Chamber and its business members was enhanced funding for roads and transportation infrastructure. A total of $1.1 billion, when counting money for local governments, is a strong start. What’s even more important is the commitment legislators made to address longer-term needs in the 2017 budget-writing session.

All four legislative caucuses and the governor’s office offered plans and spent considerable time working toward solutions. That is an excellent sign of even better things to come. In the education arena, the disastrous ISTEP test implementation in recent years led to several needed pieces of legislation. Teachers and schools will not be negatively impacted by the 2014-2015 test results, but all-important accountability remains in place and a summer panel – with the Indiana Chamber at the table – will determine a more suitable testing future for our state’s students.

Other positive legislative results included funding the third Regional Cities program, scholarships for prospective top-of-their-class teachers, a long-sought solution to the unregulated lawsuit lending industry and saving hundreds of millions of dollars with more appropriate property tax assessments of large retail facilities (aka “big box” stores).
Unfortunately, there were also two significant missed opportunities. Indiana must be seen as a welcoming place for all in order to retain and recruit top talent, new business investment and tourism. Failing to pass civil rights legislation doesn’t put Indiana in the strong position it could have been, or arguably needs to be. While this proved a bridge too
far for legislators to cross in this election year, all of our state leaders must find a way going forward to work together to craft a solution.

Despite bipartisan support, implementing a work share program barely even got out of the starting gate. Work share would benefit employees, employers and communities when the next economic downturn occurs. At the request of the Indiana Department of Workforce Development (DWD), the Indiana Chamber partnered with them to commission an independent study of why a work share program is needed. The Chamber also took the extra step of identifying viable funding options for the program’s administration. However, DWD still was unable to get on board. Until they do, this policy will, unfortunately, face an uphill climb.

If these last two items had been added to the plus column, we might just be talking slam dunks and grand slams. Still, there will be another game in town next year, and the Chamber will be back at it – pushing these policies and others that support making Indiana a more prosperous place for employers and their employees.

Read further analysis from Brinegar on several of these issues in this summary

Work Share Gets Dog and Pony Show, but No Vote

statehouse-picThe 2016 legislative session marked the first time in the last several years that the work share policy made it to the hearing stage, despite having strong bipartisan support. Still, the Chamber knew in advance of the hearing that Rep. Doug Gutwein (R-Francesville), chair of the committee, was probably not going to take a vote on the bill. Our plan was to give it our best shot and hope that the chairman would change his mind.

The bill’s author, Rep. Ober, testified that work share is a win-win for employers and employees, and he laid the groundwork for why the bill is important for both. Employers in an economic downturn retain skilled workers who receive partial unemployment compensation instead of being laid off. That means employers then do not have to rehire employees (and retrain) when the economy picks back up. Employees also retain their jobs and their employer sponsored benefits while drawing a prorated unemployment compensation benefit. Additionally, Rep. Karlee Macer (D-Indianapolis), a co-author on the bill, testified of her long-time support for the issue.

The Chamber presented study findings, released just this month; the research was conducted as a joint request by the Indiana Department of Workforce Development (DWD) and the Indiana Chamber. Noted economist Michael Hicks from Ball State University, the author of the study, was unable to be present for the hearing. The most important point made by the study was the impact on the economy. During the peak of national unemployment in 2010, Indiana having a work share program would have translated into $500,000 less in month to month income volatility and approximately 10,500 employees would have kept their jobs.

The Chamber would like to thank members Tom Easterday of Subaru Indiana Automotive and Mark Gramelspacher of Evergreen Global Advisors for taking the time out of their busy schedules to come testify before the committee in favor of work share. Their points to the committee were right on the mark. Easterday noted that Indiana is the most manufacturing intensive state in the U.S. Additionally, he talked about the state’s shortage of skilled workers and why retaining skilled workers during an economic downturn is so vital to manufacturing in Indiana – and a work share program can help accomplish that.

Gramelspacher testified, “There is a better way to run the unemployment program and that is work share. It creates a win-win from a lose-lose. This is a rare opportunity for the legislative body. Work share allows employers to maintain the employment relationship with known individuals and people that employers have already recruited, interviewed, tested, trained and invested in.”

The Indiana Institute for Working Families and AFL-CIO testified in favor of the bill as well.

The Indiana Manufacturers Association (IMA) testified that previously it was not supportive of work share, but because of the Chamber’s recent study it recognized the benefits and now supported the concept. However, the IMA then proceeded to express various concerns for implementing the actual program.

Prior to the hearing, the DWD representative acquiesced that the Chamber had been able to remove most of the agency’s arguments in opposition to the bill. In testimony, however, DWD opposed even moving the bill out of committee for further debate. That was a curious strategy, given the discussion before the hearing and the fact that the agency partnered with the Chamber on the study.

The Indiana Chamber brought forth two viable options to pay for the minimal cost to set up a state work share program and maintain it annually.

Nonetheless, the committee chairman followed DWD’s lead and announced at the close of the hearing that no vote was being taken then or essentially anytime this session.

Once again, here is why work share would be extremely beneficial for the state:

Time to Abide by New Rules in Indiana

More than 200 new state laws went into effect today. Unless you like to throw caution to the wind – which is not known as a wise tactic in the face of law enforcement – it’s a good idea to take note of what’s now on your to-do and to-don’t lists. Below are a few examples.

For Companies:

Verifying immigration status of new hire
Virtually all employers will need to confirm through the federal E-Verify database that a new employee is here legally. The penalty for employers failing to comply is loss of tax benefits. The E-verify system itself is free, but in reality employers will have internal administrative costs for running each employee check.

Machinery and equipment deductions
Businesses can now seek greater personal property deduction (abatement) from their local governments. On the table are significant tax deductions on new machinery and equipment purchases.

Union secret ballot election
Aimed at eliminating possible coercion tactics, this law requires all elections regarding employee/union representation to be conducted via a secret ballot.

For Citizens:

Don’t text while driving
This seems like a no-brainer, but apparently nothing really is. Only those using a hands-free, voice-operated smartphone can continue “texting” while actually on the road.

Drug testing before state workforce training
Unemployed Hoosiers who want to take advantage of various training programs offered by the Indiana Department of Workforce Development must be prepared to take a drug test. If you pass, you can sign up for the WorkOne training.

School choice scholarships
Low- and middle-income families unhappy with their child’s education can now apply for scholarships to help pay the cost at a public or private school of their choice. Only students who have spent at least one year in a public elementary or high school are eligible, and the program is first come, first serve (with a limited number of scholarships available).

Common sense liquor store ID requirements
No longer should stores ask to see ID before selling liquor to people who clearly were around before advent of the television. Only those who appear to be under the age of 40 will be required to produce their identification. For me, that means I will now consider it a compliment if I’m carded.

Child support before gambling
If an individual strikes it big at a casino but is also ignoring court-ordered child support obligations, those casino winnings will be withheld and applied to the outstanding support payments. It’s called prioritization.

Looking for something else? All 2011 laws and their summaries can be found in a report prepared by the Indiana Senate Majority.

Governor Signs Long-awaited Bill to Overhaul Adult Education

The following is an update on HB 1340 regarding adult education in Indiana:

Authors: Rep. Bob Behning (R-Indianapolis), Rep. Jeff Thompson (R-Lizton) and Rep. Sheila Klinker (D-West Lafayette)
Sponsors: Sen. Dennis Kruse (R-Auburn), Sen. Carlin Yoder (R-Goshen), Sen. Scott Schneider (R-Indianapolis), Sen. Karen Tallian (D-Portage) and Sen. Jim Banks (R-Columbia City)

Summary: Moves career and technical education to the Department of the Education (DOE) and assigns oversight to the State Board of Education. Moves adult education to the Department of Workforce Development (DWD) and assigns oversight to the State Workforce Innovation Council (SWIC). Assigns to the SWIC responsibility for the GED diploma program and the planning and implementation of postsecondary career and technical education.

Chamber Position: Support

Status: Signed into law by Governor Mitch Daniels on April 1; effective immediately.

Update/Chamber Action: The issues addressed in this bill have been discussed, in one way or another, for most of the last decade. The specific proposals were highlighted in a set of policy recommendations commissioned in 2009 by the Indiana Chamber Foundation and adopted subsequently by a bipartisan legislative study committee. Yet, until this year, the proposal could not even get a vote in both houses. So it’s a real mark of progress that the votes this year were unanimous and that the bill was one of the first to reach the governor’s desk.

Much of the credit for this success goes to the staff at DWD. They began laying the groundwork several months ago and helped demonstrate to both legislators and adult education providers, who previously had opposed these proposals fiercely, that the overhaul would be a positive development. The Indiana Chamber is proud to have helped in raising these issues and in ushering this bill through the Legislature. We’re also looking forward to our continued work with DWD to implement this overhaul and to realize the promising opportunities to better serve Indiana’s adult learners.