BILL ANALYSIS |
C.S.H.B. 2035 |
By: Vo |
Economic & Small Business Development |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
The Texas Workforce Commission administers the shared work unemployment compensation program. According to interested parties, the shared work unemployment compensation program offers employers an opportunity to avoid temporary layoffs of employees by reducing two or more affected employees' hours and allowing those employees to receive unemployment compensation benefits as a replacement for the loss of pay caused by the reduced hours. However, recent federal legislation reportedly changed to the law relating to these types of programs, thus requiring states to change their respective laws to be in accordance with federal law. One of the consequences of failing to make this change in Texas statutes would result in Texas employers losing a substantial unemployment tax credit. C.S.H.B. 2035 seeks to make necessary changes to bring state law into compliance with federal law, preserving an important layoff-aversion tool and ensuring continuation of the federal unemployment tax credit for Texas employers.
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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.
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ANALYSIS
C.S.H.B. 2035 amends the Labor Code to prohibit shared work benefits paid under the shared work unemployment compensation program from being charged to the account of an employer if the benefits are reimbursed by the federal government under the federal Layoff Prevention Act of 2012.
C.S.H.B. 2035 authorizes the Texas Workforce Commission (TWC) to approve a shared work plan if the plan, as one of the conditions the plan must meet for approval, describes how the employees in the affected unit will be notified in advance of the plan, if feasible; provides an estimate of the number of employees who would be laid off if the employer does not participate in the shared work plan; and permits eligible employees to participate in training. The bill authorizes TWC to approve a shared work plan if an employer, as one of the conditions the employer must meet for plan approval, certifies that participation in the shared work plan is consistent with the employer's obligations under state and federal law and agrees to furnish any information the U.S. secretary of labor determines is appropriate to those conditions.
C.S.H.B. 2035 removes from the conditions for plan approval the condition that the plan describe the manner in which the participating employer treats the fringe benefits of each employee in the affected unit and instead requires the employer to certify that, if the employer currently provides fringe benefits, the fringe benefits continue for employees in the affected unit unless those benefits are not continued for employees not participating in the shared work plan. The bill revises the condition for approval regarding the employer certification of the implementation of a shared work plan and the resulting reduction in work hours by specifying that such plan and resulting reduction in work hours is in lieu of layoffs, rather than in lieu of temporary layoffs, that would affect at least 10 percent of the employees in the affected unit and result in an equivalent reduction in work hours. The bill removes the prohibition against a shared work plan being implemented to subsidize an employer who traditionally has used part-time employees.
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EFFECTIVE DATE
September 1, 2013.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 2035 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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