HB1289 97TH GENERAL ASSEMBLY

LRB097 08400 AEK 48527 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1289

Introduced 02/09/11, by Rep. Lisa M. Dugan

SYNOPSIS AS INTRODUCED:

820 ILCS 405/407.5 new

Amends the Unemployment Insurance Act. Provides for the creation of a program of shared work benefits, under which an employee retained at reduced hours instead of being laid off may receive payment of unemployment insurance benefits reduced proportionately by the employee's weekly hours worked. An employer wishing to participate in this program must submit to the Director of Employment Security a shared work compensation plan in writing identifying specific employees for participation. This application must be done once for each 12-month period of participation in the program. The Director shall approve or reject a plan in writing within 15 days of its receipt. The Director may also revoke the approval of a shared work compensation plan for good cause. Effective July 1, 2011.

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Unemployment Insurance Act is amended by adding Section 407.5 as follows:

(820 ILCS 405/407.5 new)

Sec. 407.5. Shared Work Benefits.

A. In order to provide an economic climate conducive to the retention of skilled workers in industries adversely affected by general economic downturns and to supplement depressed buying power of employees affected by such downturns, the General Assembly finds that the public interest would be served by the enactment of laws providing greater flexibility in the payment of unemployment insurance benefits in situations where qualified employers elect to retain employees at reduced hours rather than instituting layoffs.

B. Definitions. As used in this Section:

(1) "Affected employee" means a specified employee, to which an approved shared work compensation plan applies.

(2) "Employers' association" means an association which is a party to a collective bargaining agreement under which there is a shared work compensation plan.

(3) "Fringe benefits" include health insurance, retirement benefits, paid vacation and holidays, and sick leave which are incidents of employment in addition to cash remuneration.

(4) "Shared work benefits" means the benefits payable to an affected employee under an approved shared work compensation plan as distinguished from the benefits otherwise payable under this Act.

(5) "Shared work compensation plan" means a plan of an employer, or of an employers' association, under which there is a reduction in the number of hours worked by employees rather than temporary layoffs.

(6) "Shared work employer" means an employer, one or more of whose employees are covered by a shared work compensation plan.

(7) "Unemployment insurance" means the benefits payable under this Act other than shared work benefits and includes any amounts payable pursuant to an agreement under federal law providing for compensation, assistance, or allowances with respect to unemployment.

(8) "Usual weekly hours of work" means the normal number of hours of work for the affected employee when he or she is working on a full-time basis, not to exceed 40 hours and not including overtime.

C. An employer or employers' association wishing to participate in a shared work compensation program shall submit a written and signed shared work compensation plan to the Director of Employment Security for approval. The Director shall approve a shared work compensation plan only if the following criteria are met:

(1) the plan identifies the affected employees to which it applies;

(2) each affected employee is identified by name, social security number, and any other information required by the Director;

(3) the usual weekly hours of work for each affected employee are reduced by not less than 10% and not more than 50%;

(4) fringe benefits will continue to be provided on the same basis as before the reduction in work hours; in no event shall the level of health benefits be reduced due to a reduction in hours;

(5) the plan certifies that the aggregate reduction in work hours for each affected employee is in lieu of temporary layoffs which would have resulted in an equivalent reduction in work hours;

(6) the plan is approved in writing by the collective bargaining agent for each collective bargaining agreement covering any affected employee;

(7) the plan will not subsidize seasonal employers during the off season nor subsidize employers who have traditionally used part-time employees; and

(8) the employer agrees to furnish reports necessary for the proper administration of the plan and to permit access by the Director to all records necessary to verify the plan before approval and after approval to evaluate the application of the plan.

In addition to subdivisions (1) through (8) of this subsection C, the Director shall take into account any other factors which may be pertinent.

D. The Director shall approve or reject a shared work compensation plan in writing within 15 days of its receipt. The reasons for the rejection shall be final and nonappealable, but the rejection shall not prevent an employer from submitting another plan for approval not earlier than 15 days after the date of a previous written rejection.

E. If an approved plan or any representation for implementation of the plan is intentionally and substantially misleading or false, any individual who participated in any such misrepresentation has committed a Class B misdemeanor and is personally liable for any amount of benefits deemed by the Director to have been improperly paid from the fund as a result thereof. This provision for personal liability is in addition to any remedy against individual claimants for collection of overpayment of benefits if such claimants participated in or were otherwise at fault in the overpayment.

F. A shared work compensation plan shall be effective on the date agreed upon by the Director and the employer but no later than the first day of the second calendar week after the date of the Director's approval, unless a later date is requested by the employer. The plan shall expire at the end of the twelfth full calendar month after its effective date, or on the date specified in the plan if that date is earlier, unless the plan is revoked before that date by the Director. If a plan is revoked by the Director, it shall terminate on the date specified in the Director's order of revocation.

G. The Director may revoke approval of a shared work compensation plan for good cause. The revocation order shall be in writing and shall specify the date the revocation is effective and the reasons for the revocation. Good cause for revocation shall include but is not limited to failure to comply with the assurances given in the plan, unreasonable revision of productivity standards, conduct or occurrences tending to defeat the intent and effective operation of the plan, and violation of the criteria on which approval of the plan was based.

An action to revoke approval of a shared work compensation plan may be initiated at any time by the Director on his or her own motion, on the motion of any of the affected employees, or on the motion of the appropriate collective bargaining agents. The Director shall review each plan at least once within the 12-month period the plan is in effect to assure that it continues to meet the requirements of this Section.

H. An approved shared work compensation plan in effect may be modified with the approval of the Director. If the hours of work are increased or decreased beyond the level in the original plan, or any other condition is changed, the employer shall promptly notify the Director. If the changes meet the requirements for approval of a plan, the Director shall approve the modifications. This approval shall not change the expiration date of the original plan. If the modifications do not meet the requirements for approval, the Director shall revoke the plan as specified in subsection G.

I. An individual is eligible to receive shared work benefits with respect to any week only if, in addition to meeting the conditions of eligibility for other benefits under this Act, the Director finds that:

(1) the individual was employed during that week as an affected employee under an approved shared work compensation plan which was in effect for that week; and

(2) the individual was able to work and was available for additional hours of work and for full-time work with the shared work employer.

Notwithstanding any other provision of this Act, an individual is deemed to have been unemployed in any week for which remuneration is payable to him or her as an affected employee for less than his or her normal weekly hours of work as specified under the approved shared work compensation plan in effect for that week.

J. Benefits.

(1) The shared work weekly benefit amount shall be the product of the weekly benefit amount, as determined in accordance with Section 401, multiplied by the percentage of reduction in the individual's usual weekly hours of work.

(2) No individual is eligible in any benefit year for more than the maximum entitlement established for benefits under this Act, including benefits under this Section.

(3) The shared work benefits paid an individual shall be deducted from the maximum benefit amount established pursuant to Section 403 for that individual's benefit year.

(4) Claims for shared work benefits shall be filed in the same manner as claims for other benefits under this Act or as prescribed by the Director by rule.

(5) Provisions otherwise applicable to unemployment insurance claimants under this Act apply to shared work claimants to the extent that they are not inconsistent with this Section.

(6)(a) If an individual works in the same week for an employer other than the shared work employer and his or her combined hours of work for both employers are equal to or greater than the usual weekly hours of work with the shared work employer, the individual shall not be entitled to benefits under this Section.

(b) If an individual works in the same week for both the shared work employer and another employer and his or her combined hours of work for both employers are less than his or her usual weekly hours of work, the benefit amount payable for that week shall be the weekly benefit amount, as determined in accordance with Section 401, reduced by the same percentage that the combined hours are of the usual weekly hours of work.

(7) An individual who does not work during a week for the shared work employer, and is otherwise eligible, shall be paid his or her full weekly benefit amount.

(8) An individual who does not work for the shared work employer during a week but works for another employer, and is otherwise eligible, shall be paid benefits for that week under the provisions of Section 402.

K. Shared work benefits shall be charged to employers' experience rating records in the same manner as other benefits under this Act are charged. Employers liable for payments in lieu of contributions shall have shared work benefits attributed to their records in the same manner as other benefits under this Act are attributed.

L. An individual who has received all of the shared work benefits, or all of the combined unemployment insurance and shared work benefits, available in a benefit year shall be considered an exhaustee for purposes of the extended benefits program under Section 409, and, if otherwise eligible under that Section, shall be eligible to receive extended benefits.

M. Unless inconsistent with or otherwise provided by this Section, this Act and rules adopted under this Act apply to shared work benefits. To the extent permitted by federal law, those rules may make such distinctions and requirements as may be necessary with respect to unemployed individuals to carry out the purposes of this Section, including rules defining usual hours, days, work week, wages, and the duration of plans adopted under this Section. To the extent that any portion of this Section may be inconsistent with the requirements of federal law relating to the payment of unemployment insurance benefits, the conflicting provisions or interpretations of this Section shall be deemed inoperative, but only to the extent of the conflict. If the Director determines that such a conflict exists, a statement to that effect shall be filed with the Governor's office for transmission to both houses of the General Assembly.

N. The Director shall adopt such rules as are necessary to carry out the purposes of this Section.

Section 99. Effective date. This Act takes effect July 1, 2011.