House Study Bill 601 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON LABOR BILL BY CHAIRPERSON FORRISTALL) A BILL FOR An Act relating to conformity with federal law concerning the 1 voluntary shared work program under the state unemployment 2 insurance law and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5594YC (3) 85 je/rj

H.F. _____ Section 1. Section 96.40, subsection 2, paragraphs b, d, e, 1 f, and j, Code 2014, are amended to read as follows: 2 b. The plan certifies that the aggregate reduction in work 3 hours is in lieu of temporary layoffs which would have affected 4 at least ten percent of the employees in the affected unit or 5 units to which the plan applies and which would have resulted 6 in an equivalent reduction in work hours. The employer 7 provides an estimate of the number of layoffs that would occur 8 absent participation in the program. “Affected unit” means a 9 specified plant, department, shift, or other definable unit. 10 d. The shared work plan reduces the normal weekly hours 11 of work for an employee in the affected unit by not less 12 than twenty percent and not more than fifty percent with a 13 corresponding reduction in wages. Only full-time employees who 14 normally work between thirty-five and forty hours per week are 15 eligible to participate. 16 e. The reduction in hours and corresponding reduction in 17 wages must be applied equally to all of the full-time employees 18 in the affected unit. 19 f. The plan provides that fringe benefits will continue 20 to be provided to employees in affected units as though their 21 workweeks had not been reduced or to the same extent as other 22 employees not participating in the program . “Fringe benefits” 23 means employer-provided health benefits and retirement benefits 24 under a defined benefit plan or a defined contribution plan 25 pursuant to the Internal Revenue Code. 26 j. The plan is approved in writing by the collective 27 bargaining representative for each employee organization 28 or union which has members in the affected unit , and the 29 plan provides for notification to employees in advance of 30 participation . 31 Sec. 2. Section 96.40, subsection 2, Code 2014, is amended 32 by adding the following new paragraph: 33 NEW PARAGRAPH . k. Participation by the employer shall be 34 consistent with applicable federal and state laws. 35 -1- LSB 5594YC (3) 85 je/rj 1/ 4

H.F. _____ Sec. 3. Section 96.40, subsections 7 and 9, Code 2014, are 1 amended to read as follows: 2 7. The department shall pay an individual who is eligible 3 for shared work benefits under this section a weekly shared 4 work benefit amount equal to the individual’s regular weekly 5 benefit amount for a period of total unemployment, less any 6 deductible amounts under this chapter except wages received 7 from any employer, multiplied by the full percentage of 8 reduction in the individual’s hours as set forth in the 9 employer’s shared work plan. If the shared work benefit amount 10 calculated under this subsection is not a multiple of one 11 dollar, the department shall round the amount so calculated to 12 the next lowest multiple of one dollar. An individual shall be 13 ineligible eligible for shared work benefits for any week in 14 which the individual performs paid work for the participating 15 employer in excess of the reduced hours established under the 16 shared work plan for a number of hours equal to not less than 17 twenty percent and not more than fifty percent of the normal 18 weekly hours of work for the employee . 19 9. a. Notwithstanding any other provisions of this chapter , 20 all All benefits paid under a shared work plan , which are 21 chargeable to the participating employer or any other base 22 period employer of a participating employee, shall be charged 23 to the account of the participating employer under the plan in 24 the manner provided in this chapter for the charging of regular 25 benefits . 26 b. An employer may provide as part of the plan a training 27 program the employees may attend during the hours that have 28 been reduced. Such a training program may include a training 29 program funded under the Workforce Investment Act of 1998, 30 Pub. L. No. 105-220. If the employer is able to show that 31 the training program will provide a substantive increase in 32 the workplace and employability skills of the employee so as 33 to reduce the potential for future periods of unemployment, 34 the department shall relieve the employer of charges for 35 -2- LSB 5594YC (3) 85 je/rj 2/ 4

H.F. _____ benefits paid to the individual attending training under the 1 plan. The employee may attend the training at the work site 2 utilizing internal resources, provided the training is outside 3 of the normal course of employment, or in conjunction with an 4 educational institution. 5 Sec. 4. APPLICABILITY. This Act applies to all voluntary 6 shared work plans approved by the department of workforce 7 development on or after July 1, 2014. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill conforms the voluntary shared work program under 12 the state unemployment insurance law to the requirements of 13 sections 2161, 2162, and 2165 of the federal Middle Class Tax 14 Relief and Job Creation Act of 2012, Pub. L. No. 112-96. 15 Under current law, the program applies only to temporary 16 layoffs and full-time employees. The bill strikes these 17 limitations. The bill requires participating employers to 18 provide the department of workforce development an estimate of 19 the number of layoffs that would occur absent participation in 20 the program. The bill defines “fringe benefits” for purposes 21 of the program as employer-provided health benefits and 22 retirement benefits under a defined benefit plan or a defined 23 contribution plan pursuant to the Internal Revenue Code. The 24 bill requires employers to notify their employees in advance 25 of participation in the program. The bill specifies that 26 participation in the program by an employer must be consistent 27 with applicable federal and state laws. The bill provides that 28 voluntary shared work benefits are available if an employee’s 29 normal weekly hours of work are reduced by not less than 20 30 percent and not more than 50 percent. The bill provides that 31 voluntary shared work benefits are to be charged to employers 32 in the same manner as regular unemployment insurance benefits. 33 The bill provides that job training funded under the federal 34 Workforce Investment Act of 1998, Pub. L. No. 105-220, is 35 -3- LSB 5594YC (3) 85 je/rj 3/ 4

H.F. _____ included as training that may be provided for employees by 1 employers under the program. 2 The bill applies to all voluntary shared work plans approved 3 by the department of workforce development on or after July 1, 4 2014. 5 -4- LSB 5594YC (3) 85 je/rj 4/ 4