BILL ANALYSIS

H.B. 1637

By: Turner, Chris

Technology, Economic Development & Workforce

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The shared work unemployment compensation program is a true benefit for Texas employers and their employees, especially during challenging economic times.

During challenging times, companies consider many options to ensure their operations remain viable. When considering these different options, companies prefer to maximize employment and avoid permanent workforce reductions, if possible. The shared work unemployment compensation program creates an alternative option by providing proportionate unemployment compensation for a temporary reduction in work hours, rather than permanent job loss.

Current benefits provided by the program are based on a 40-hour work week.  However, many businesses and their employees, particularly those in the manufacturing industry, do not work 40-hour work weeks.  In the case of manufacturing facilities, employees work compressed schedules to maintain operations on a 24-hour, 7 day-a-week basis. As a result, employees on each shift work 3 days one week and 4 days the next. For these businesses, the average of a two-week paycheck period is 40 hours per week if the period is broken down to an individual week showing 33.48 hours worked the first week and 44.64 hours worked the second week.

Enhancing the shared work unemployment compensation program to reflect an average 40-hour work week over a two- week period to address changes in shift-work schedules will ensure that benefits from the program are equal to all industries throughout Texas.  Doing so will create further options for Texas companies and their employees, helping to maintain the state’s skilled, trained, and competitive workforce during challenging times.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 1637 amends the Labor Code to define "normal weekly hours of work" for purposes of the shared work unemployment compensation program as the number of hours in a week that an employee ordinarily works for a participating employer or an average of 40 hours per week over a two-week pay period, rather than 40 hours, whichever is less.

EFFECTIVE DATE

On passage, or, if the act does not receive the necessary vote, the act takes effect September 1, 2009.