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!

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:

Four Areas Where Gov. Pence’s State of the State Address Missed the Mark

?????????????????????????????????????????The 2016 session of the Indiana General Assembly may be short in time but, as usual, there is a long list of important issues. In outlining his priorities in the State of the State speech, however, Gov. Mike Pence fell short in four key areas.

First is civil rights expansion. After appropriately listening to Hoosiers since last spring’s public relations crisis, the Governor failed to articulate a clear vision. His words, depending on interpretation, bordered on telling legislators to do nothing at a time when action is needed.

The Indiana Chamber went through a similar lengthy listening process as public policy committees, the executive committee and the full board of directors (all comprised of representatives of member companies) debated the issue. Once a final determination was made, the Chamber communicated the decision that the members had voted to support the expansion of civil rights to protect sexual orientation and gender identity. Although not popular in all circles, similar clarity was needed from the Governor.

In the critical area of infrastructure funding, the Governor advocated against the only long-term solution presented thus far because it included several responsible revenue increases. As an organization that works each day to create and maintain the best possible business climate, the Indiana Chamber does not go looking for tax hikes. But in this case, they are necessary.

Third, on education, the “let’s take a step back on ISTEP” remark goes too far. Indiana already has a new test that measures our new, stronger standards. The test needs rebranded, not revised, and administered correctly to achieve the desired results.

Finally, there was no mention of work share, a common sense program to support employers and employees in an economic downturn. It will be needed at some point and the best time to implement it is now.

The Indiana Chamber has and will continue to communicate with the Governor and his staff our positions on these issues, which we believe are in the best interest of the state’s economy, employers and workers.

Report: Work Share Program Would Have Positive Impact on Indiana

CYNJvbRUoAA_kOmA new report released today by the Indiana Chamber of Commerce encourages the state to implement a voluntary work share program, labeling it “a clear stabilizer during a business cycle.” Work share would enable employees to stay on their job at reduced hours during tough economic times and collect partial unemployment compensation.

The policy – currently in place in more than half the states – has enjoyed support on both sides of the aisle the last few years, but has yet to make much progress in the state Legislature. The Indiana Chamber hopes this research, led by Michael Hicks of the Center for Business and Economic Research at Ball State University, will help get the ball rolling to pass work share legislation. The research was conducted at the request of the Indiana Chamber Foundation and the Indiana Department of Workforce Development.

The overriding conclusion reached by Hicks is that a “work share program would reduce business costs for participating firms by reducing search and hiring costs, and would stabilize families and communities.”

He continues, “We anticipate that unemployment and earnings will suffer less volatility associated with an economic downturn. This may have longer term impacts by reducing long-term unemployment and increasing consumer spending and growth in sales tax revenues over the short run.”

The report notes that the manufacturing sector, particularly the medium-sized manufacturing firms, would be the ones using the program the most. Indiana remains the most manufacturing intensive state in the country.

These findings confirm what advocates have been saying for several years, remarks Indiana Chamber President and CEO Kevin Brinegar.

“The benefits are real and significant. Work share allows employers to maintain a skilled, trained and stable workforce, while at the same time, employees keep their jobs and benefits instead of facing unemployment and further financial uncertainty.

“There is no negative impact on the state’s unemployment insurance fund,” he offers. “Instead of paying full benefits to a smaller group of recipients, a larger group of employees will receive reduced benefits.”

Here’s an example of how a work share program unfolds. Instead of laying off 10 workers due to decreased demand, a company could keep the full workforce in place but reduce the hours of 40 workers by 25%. The impacted employees would receive three-quarters of their normal salary, as well as be eligible for partial unemployment insurance benefits to supplement their reduced paycheck and keep full benefits.

Brinegar explains that “work share is generally a temporary solution used by employers for no more than six months during an economic slowdown.”

Tom Easterday, executive vice president for Subaru of Indiana Automotive in Lafayette, believes now – while the state’s economic picture is still bright – is the perfect time to enact a work share program.

“If we wait until there’s another economic downturn to take action, then it will be too late. Businesses across Indiana may already be impacted and jobs will be in jeopardy. Now is the time to prepare by implementing an efficient and effective workshare program, so it’s in place when needed.”

In the report, Hicks replays the unfortunate domino effect that took place in Kokomo in 2009 when two large automakers (GM and Fiat-Chrysler) suspended manufacturing for two months. While they could afford to continue employment due to their cash reserves, their large supply chain of smaller companies could not and were forced to lay off employees.

“Work share would have likely enabled some of these operations to continue at a slower pace. … The commercial benefits would have accrued primarily to these smaller manufacturing firms and would likely have stabilized the Kokomo economy significantly during this time.”

Brinegar reveals that early estimates place the annual costs to establish and operate a work share program in Indiana to be between $1 million and $1.5 million. He believes a nominal yearly surcharge of $10-$15 for those Hoosier businesses currently paying into the unemployment insurance fund would reach that amount and make the most sense.

“The amount is so small, especially for the possible benefits to an employer down the road,” he begins. “This group also received a per employee break recently when the state executed the early payoff of the federal unemployment insurance loan. This saved each business more than $126 per employee.”

Establishing a work share program in the state is one of the Indiana Chamber’s 2016 top legislative priorities.

The work share research document is available at www.indianachamber.com/labor.

Work Share Bill Filed with Hopes of Hearing in 2016

Representative David Ober (R-Albion) filed a work sharing bill on Organization Day. The House clerk’s office indicated that House Bill 1014 was the fourth bill to be filed. House Bill 1014 would create a work share program, which is one of the Indiana Chamber’s top priorities for the 2016 legislative session.

Work share is a voluntary program that allows employers to maintain a skilled and stable workforce during temporary downturns. It allows employees to keep their jobs and benefits instead of facing unemployment and further financial uncertainty. And the state wins through a reduction in job losses.

Here’s an example of how it works: Instead of laying off 10 workers due to decreased demand, a company could keep the full workforce in place but reduce the hours of 40 workers by 25%. The impacted employees would receive three-quarters of their normal salary, as well as be eligible for partial unemployment insurance benefits to supplement their reduced paycheck.

Just like regular unemployment insurance, work sharing benefits would not fully cover lost income. They would, however, help mitigate the loss. There is no negative impact on the state’s unemployment insurance fund. Instead of paying full benefits to a smaller group of recipients, a larger group of employees will receive limited benefits – but most importantly remain on the job.

Work share programs are in place in more than half the states. They are intended as temporary solutions, usually lasting no more than six months.

Representative Ober has been a champion of work share and is hopeful that this is the year that the bill will garner a hearing. The bill is expected to be assigned to House Employment, Labor and Pensions Committee, where Rep. Doug Gutwein (R-Francesville) presides as chairman.

Indiana Chamber Unveils Our Top Six Legislative Priorities for 2016

statehouse picTransportation infrastructure funding, reverse credit transfer to the state’s accredited two-year colleges and expansion of the state’s civil rights law are among the Indiana Chamber of Commerce’s top priorities for the 2016 session.

These objectives were announced at the organization’s annual Central Indiana Legislative Preview in Indianapolis today.

The Indiana Chamber proposes an array of strategies to establish a sustainable funding stream for the state’s roads, highways and bridges. These include dedicating more of the state’s sales tax on fuel purchases to infrastructure, increasing and indexing fuel excise taxes and implementing fees on alternative fuel vehicles.

“Indiana benefited greatly from the Major Moves program that accelerated our timeline and funded $4 billion worth of projects over the last decade. But those dollars are spent or allocated. It’s time to move forward with the next generation of resources to drive our economy by moving people and products throughout our state and beyond,” says Indiana Chamber President and CEO Kevin Brinegar.

“Legislative action is needed in the coming session to address glaring needs and begin implementing long-term strategies to allow our state to live up to its ‘Crossroads of America’ designation.”

Brinegar concludes that the good news is that legislative leaders, the Governor and others are on the same page about the need; the challenge will be how to get there.

Higher education is also a focal point for the Indiana Chamber. One specific proposal the organization will be pushing for is a method to allow for more students to turn their existing college credits into a two-year degree. This would be accomplished by allowing specific credits earned at state-supported colleges and universities to be transferrable to Indiana’s accredited two-year schools, such as Ivy Tech and Vincennes. Credit is already generally transferrable from the two-year schools to their four-year counterparts.

“This would give students more opportunity for post-secondary attainment and then obviously help with employment,” Brinegar offers. “Specifically, it would help fill the gap for those individuals who first went to a four-year school but for whatever reason couldn’t continue. This would be a viable path for them to turn their efforts into a two-year degree and become more attractive to employers.”

Earlier this month, the Indiana Chamber announced its support for expanding the state’s civil rights law to include protection for sexual orientation and gender identity, with Brinegar noting:

“The time has come for Indiana to expand protections against potential discrimination. This action will increase the state’s future business competitiveness in the recruitment, attraction and retention of talent, as well as enhance respect for all employers and employees. We encourage our state leaders to work together to take this next critical step.”

Another initiative the organization will again pursue is a work sharing program, which will allow employers to maintain a skilled stable workforce during temporary downturns and enable employees to keep their jobs but with reduced hours and salary (which is partially offset by unemployment insurance). This program has enjoyed support on both sides of the aisle the last few years, but has yet to cross the finish line.

“There is no negative impact on the state’s unemployment insurance fund. Instead of paying full benefits to a smaller group of recipients, a larger group of employees will receive limited benefits – but most importantly remain on the job,” Brinegar explains. “There is no reason not to enact a work share program to help meet future employee and employer needs. They deserve that option.”

The other two legislative priorities for the Indiana Chamber are maintaining a fair and equitable system for the state’s commercial property assessment and appeal procedures (in the face of recent “big box” retail stores’ appeals and reaction to that); and expanding publicly-funded preschool from the pilot program to statewide so more children are prepared to enter kindergarten.

A complete rundown of the Indiana Chamber’s 2016 key legislative initiatives (top priorities and additional areas of focus) is available at www.indianachamber.com/priorities.

Also at the legislative preview event, four state legislators were honored as Indiana Chamber Small Business Champions “for their hard work and dedication to improving Indiana’s small business climate.” This award is based on voting and advocacy during the 2015 legislative session.

The 2015 Small Business Champions are: Sen. Rodric Bray from Martinsville, District #37; Sen. Carlin Yoder from Middlebury, District #12; Rep. David Ober from Albion, District #82; and Rep. John Price from Greenwood, District #47.

Recap of the Indiana Chamber’s Top 6 legislative priorities:

  • Support an array of strategies to establish a sustainable funding stream for the state’s roads, highways and bridges
  • Support specific credit transfer from Indiana’s four-year, state-supported institutions to the state’s accredited two-year colleges
  • Support expanding the state’s civil rights law to include protection for sexual orientation and gender identity
  • Support a work sharing program that will allow employers to maintain a skilled stable workforce during temporary downturns
  • Support maintaining a fair and equitable system for the state’s commercial property assessment and appeal procedures
  • Support the development of publicly-funded preschool initiatives statewide

Work Share Program Needed in Indiana

Right now, state lawmakers and their staff are drafting bills for introduction and molding strategies for the opening of the Indiana General Assembly only three weeks away. One of the most important things they can do is to enact a work share program for the state.

Work Share, or short-term compensation as it is sometimes called, is a voluntary and cost equivalent alternative to traditional unemployment benefits.

In lieu of laying off a number of employees during an economic downturn, an employer elects to retain those employees and reduce the hours of employees of a particular group or department. Those employees are then permitted to draw a partial unemployment compensation benefit based upon the hours reduced.

Employers are able to maintain a skilled and stable workforce while employees are able to keep their jobs and benefits instead of facing unemployment and economic ruin. The state wins by reducing the number of job losses. Taxpayers win in keeping jobs in place with no net increase in unemployment insurance costs.

Work share is an innovative, win-win program now in place in 26 states, but not yet in Indiana. State legislators need to hear from employers and citizens alike right now to urge them to seriously consider and enact a work share program in the next few months.

Please take a moment to send a message to your own state legislators urging them to move forward and establish a work share program in 2015. Simply visit the Indiana Chamber’s online grassroots center to send an email message to your legislators.

 

Study Committee Wraps Up Work Share Debate

At the end of August, the Interim Employment and Labor Committee heard testimony on work sharing, which was reported by the Indiana Chamber at that time. Recently, the committee met very briefly and reported its findings, but ultimately failed to issue a supportive recommendation.

Because of the number of committee members absent, it may have been difficult to get a recommendation that work share legislation be passed in 2015. As a result, Rep. David Ober (R – Albion) opted for a more neutral “report finding” and has assured the Indiana Chamber that there will be a work sharing bill filed for the upcoming legislative session.

While disappointed that a recommendation to support work share was not proposed, we are looking forward to once again continuing the debate. The Chamber expects to push forward on this issue, which would be a win for employees, business and state government.

NOTE: A work sharing program would allow employers to maintain a skilled and stable workforce during temporary downturns. Employers could reduce employee hours without layoffs, enabling workers to keep their jobs – which hopefully could be returned to full-time status once economic circumstances improve. The employer continues to provide benefits such as health insurance and retirement plans, while impacted employees are permitted to draw a partial unemployment benefit based upon the reduced hours. 

Time for Work Share to Happen in Indiana

Work share is a positive option for both companies and their employees in times of economic need. It is a voluntary program that allows employers to maintain a skilled and stable workforce during temporary economic downturns.

Here’s an example of how it works. Instead of laying off 10 workers due to decreased demand, a company could keep the full workforce in place but reduce the hours of 40 workers by 25%. The impacted employees would receive three-quarters of their normal salary, as well as be eligible for partial unemployment insurance benefits to supplement their reduced paycheck.

Just like regular unemployment insurance, work sharing benefits would not fully cover lost income. They would, however, help mitigate the loss.

There is no negative impact on the state’s unemployment insurance fund.

Work share programs are in place in more than 25 states. They are intended as temporary solutions, usually lasting no more than six months. The biggest users are manufacturers, where work flow often varies based on current contracts.

Neighboring Michigan and Ohio passed legislation that authorized work share programs. Indiana failed to do so the last two years, despite support in both political parties. Let’s finally make it happen in 2015.

Making the Best of a Difficult Situation

In strong economic times, most college graduates quickly enter the workforce, utilize their skills to move up within their organizations and advance to leadership positions — either at their original company or elsewhere. (I hope that is the case with a daughter soon to finish her college career at DePauw).

In today's reality, that isn't always the way it works. In a worst-case scenario, one might need the following assistance through an article titled: "The Recent Grad's Guide to Surviving Layoffs." After taking care of some necessary financial matters, there is very sound advice (condensed below) on turning a layoff into "an opportunity rather than a catastrophe." The full article is available here.

And there is always the Indiana Chamber's Indiana INTERNnet program to guide you through the world of internships.

Obtain Additional Education

  •  Certification Program: If finances and your personal circumstances permit, you may take this opportunity to earn a post-baccalaureate certificate in your industry. Additional certifications will build on the experience you already have and make you a more competitive candidate for a new position.
  •  Graduate School: Some master’s programs require students to have worked in the industry before returning to school; viewed positively, this could be a golden opportunity. Full-time graduate students may defer student loan obligations and may also be eligible for more financial aid. Attending an online school may also be an attractive option.
  • Federal Job Training Programs: The federal government has resources in place for unemployed individuals to acquire additional training. Funds that assist dislocated workers are available through CareerOneStop, a service provided by the U.S. Dept. of Labor.

 Stay Active in Your Industry

  •  Use Your Former Employer as a Resource: While it may seem counterintuitive, staying in contact with your former employer can unearth opportunities to network that you may not have expected. Ask if outplacement services are offered, and follow up if so.
  •  Tap Into Your Network: Reach out to friends and colleagues and explain your situation in simple terms; there is no social stigma to being laid off and no need to be embarrassed. Using social media tools can help you reach people you otherwise would never have met.
  •  Be an Industry Insider: If cost is not prohibitive, attend industry events like conferences, trade shows or seminars. You will continue to build your contact list, keep your face in front of people who have the potential to hire you, and learn new skills at the same time.
  •  Continue to Read, Research, and Learn: As you search for new employment, keep up on industry news by subscribing to trade publications or attending association meetings.

 Create Opportunities to Gain Work Experience

  •  Part-Time Work: Consider part-time work, possibly from the company that laid you off in the first place. The concept of Survivor Demotions often doesn’t occur to employers; if you’re about to lose your salaried position, ask if you can take a demotion to a lower-level job in the company or perform your old job on a part-time basis.
  •  Work Share: In some states, companies that are downsizing are willing to implement work-sharing programs. Rather than eliminating jobs in the workforce, these companies reduce the hours and benefits of a group of workers. These workers are still eligible for partial unemployment insurance, and therefore don’t experience a loss in income until unemployment resources end.
  •  Contract Positions: Temporary or contract positions also provide experience and help you meet new people in influential positions.
  •  Volunteer: Using your unique skills in a volunteer position can increase your networking opportunities while you perform a good deed. Unpaid internships may also lead to new business contacts or a full-time position.