Important Changes to Unemployment in Indiana

Cara Ottenweller

By: Cara Ottenweller - Associate, Ice Miller Labor and Employment Group

Category: Business Law

The Indiana General Assembly passed new laws this year that may affect an individual's eligibility for unemployment insurance benefits. For example, effective July 1, 2011, employees who work on an on-call or as-needed basis may not be eligible for unemployment insurance benefits. Additionally, workers employed at a business during a planned short-term shutdown or employer-mandated vacation may not be eligible for benefits. These are just two examples of the recent legislative changes.

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The Indiana General Assembly passed new laws this year that may affect an individual's eligibility for unemployment insurance benefits. For example, effective July 1, 2011, employees who work on an on-call or as-needed basis may not be eligible for unemployment insurance benefits. Additionally, workers employed at a business during a planned short-term shutdown or employer-mandated vacation may not be eligible for benefits. These are just two examples of the recent legislative changes.

As for on-call employees, these are individuals who are regularly and customarily employed on an on-call or as-needed basis. Typically, these employees work whenever the employer needs work, and they have no set schedule. According to the Department of Workforce Development (DWD), these workers will not be eligible for unemployment insurance during a week in which they either 1) receive pay or 2) refuse available work. The DWD further provides that an employer contesting an unemployment claim filed by an on-call employee must show that the individual knew at the time of hire that they would not have a set work schedule and that hours would fluctuate depending on the employer's needs. The employer must also show that the individual received pay or refused work during the week in which the employee is seeking unemployment. As a practical matter, employers should review job descriptions and postings for these types of positions to ensure that employees understand from the outset the on-call nature of their job.

Employees working for businesses that require a mandatory vacation period or planned short-term shutdown (paid or unpaid) may also be ineligible for unemployment benefits. According to the DWD, to prove that an employee is ineligible for unemployment benefits during a planned shutdown or vacation, employers must show that they notified employees – in writing – of the dates of the planned shutdown or employer-mandated vacation at the time of hire or at least 180 days (or six months) before the shutdown or vacation period commenced. Employees must also have reasonable assurance that employment will continue at the conclusion of the shutdown or vacation period. For those employers that implement annual shutdowns, now would be a good time to review your handbooks, policies, and employment contracts to ensure that you are providing appropriate notice of a planned short-term shutdown to your employees and that the employees understand that they will resume work after the shutdown or vacation period ends.

There are a variety of other changes occurring within Indiana's unemployment system. For example, employees of certain Head Start programs who are on planned breaks such as summer vacation may no longer be eligible for unemployment, individuals who retire or accept a voluntary buyout may no longer be eligible for unemployment, and beginning in October 2011, certain amounts received by an employee as severance pay will be deducted from the employee's weekly unemployment insurance benefits. Given the significant changes to unemployment law and administration in Indiana, employers should familiarize themselves with the new legislation and the DWD's new policies, and contact legal counsel for additional information and guidance.

Cara Ottenweller is an associate in the Firm's Labor and Employment Group. She represents employers in a broad range of employment law matters, including federal and state litigation, administrative proceedings before the EEOC and the NLRB, collective bargaining negotiations, arbitrations, union organizing, and the development of employment handbooks, policies, and practices. Cara can be reached at: (317) 236-2326 or cara.ottenweller@icemiller.com.


This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

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