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Companies Consider Program To Cut Hours Instead Of Layoffs

By Brandon Smith

Posted August 27, 2014

State lawmakers are exploring the creation of a work share program to give companies the option of reducing employee hours rather than using layoffs during economic downturn.

Work share programs allow companies to reduce employee hours in lieu of layoffs, while the workers collect partial unemployment benefits.

Indiana Chamber Vice President Mike Ripley says they benefit both employers and employee.

Companies don't lose skilled workers and hurt morale. Workers keep employment benefits such as health insurance and pensions.

He says while work share won't be a cure-all to solve problems created by a recession or economic downturn, it can be a useful tool.

"Not everybody's going to use it; there's probably going to be relatively few," Ripley says. "But even if we save five hundred, a thousand jobs – it's that better than having people laid off?"

Indiana Department of Workforce Development deputy commissioner Josh Richardson says his agency is opposed to work share both philosophically and technically.

He says the program would put more pressure on the state's unemployment insurance trust fund, and Indiana is still paying off the federal loan it had to take out for the fund during the last recession.

"The question is, do we really want to make it cheaper or easier to reduce people's work hours? And I think that there's some fear that doing that could result in additional reductions and that that then harms the trust fund," Richardson says.

Rep. Dave Ober, R-Albion, who chairs a study committee investigating the issue, says he plans to have a draft recommendation for the full General Assembly ready for a vote by the committee in October.

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