Bill Text: MI SB1094 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Employment security; benefits; eligibility when receiving reduced wages under a shared-work plan; allow. Amends 1936 (Ex Sess) PA 1 (MCL 421.1 - 421.75) by adding secs. 28b, 28c, 28d, 28e, 28f, 28g, 28h, 28i, 28j, 28k, 28l & 28m.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Passed) 2012-07-18 - Assigned Pa 0216'12 With Immediate Effect [SB1094 Detail]
Download: Michigan-2011-SB1094-Engrossed.html
SB-1094, As Passed Senate, May 23, 2012
SUBSTITUTE FOR
SENATE BILL NO. 1094
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
(MCL 421.1 to 421.75) by adding sections 28b, 28c, 28d, 28e, 28f,
28g, 28h, 28i, 28j, 28k, 28l, and 28m.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 28b. As used in this section and sections 28c to 28m:
(a) "Affected unit" means a department, shift, or other
organizational unit of 2 or more employees that is designated by an
employer to participate in a shared-work plan.
(b) "Approved shared-work plan" means an employer's shared-
work plan that meets the requirements of section 28d and that the
unemployment agency approves in writing.
(c) "Fringe benefit" means health insurance, a retirement
benefit received under a pension plan or defined contribution plan,
a paid vacation day, a paid holiday, sick leave, or any other
similar employee benefit provided by an employer.
(d) "Normal weekly hours of work" means the established
standard work times and number of hours in the workweek for the
position or, if standard work times and number of hours have not
been established for the position, the work times and average
number of hours per week actually worked by the employee in that
position over the most recent 3 months before the employer files
the application for designation as a participating employer.
(e) "Participating employee" means an employee in the affected
unit whose hours of work are reduced by the reduction percentage
under the shared-work plan. Participating employee does not include
a seasonal worker as defined in section 27(o)(9)(e) or a worker
employed on a temporary or intermittent basis.
(f) "Participating employer" means an employer that has a
shared-work plan in effect.
(g) "Reduction percentage" means the percentage by which each
participating employee's normal weekly hours of work are reduced
under a shared-work plan in accordance with section 28d(2).
(h) "Shared-work plan" means a plan for reducing unemployment
under which employees of an affected unit share a reduced workload
through reduction in their normal weekly hours of work.
Sec. 28c. (1) An employer that meets all of the following
requirements may apply to the unemployment agency for approval of a
shared-work plan:
(a) The employer has filed all quarterly reports and other
reports required under this act and has paid all obligation
assessments, contributions, reimbursements in lieu of
contributions, interest, and penalties due through the date of the
employer's application.
(b) If the employer is a contributing employer, the employer's
reserve in the employer's experience account as of the most recent
computation date preceding the date of the employer's application
is a positive number.
(c) The employer has paid wages for the 12 consecutive
calendar quarters preceding the date of the employer's application.
(2) An application under this section shall be made in the
manner prescribed by the unemployment agency and contain all of the
following:
(a) The employer's assurance that it will provide reports to
the unemployment agency relating to the operation of its shared-
work plan at the times and in the manner prescribed by the
unemployment agency and containing all information required by the
unemployment agency.
(b) The employer's assurance that it will not hire new
employees in, or transfer employees to, the affected unit during
the effective period of the shared-work plan.
(c) The employer's assurance that it will not lay off
participating employees during the effective period of the shared-
work plan, or reduce participating employees' hours of work by more
than the reduction percentage during the effective period of the
shared-work plan, except in cases of holidays, designated vacation
periods, equipment maintenance, or similar circumstances.
(d) The employer's certification that it has obtained the
approval of any applicable collective bargaining unit
representative and has notified all affected employees who are not
in a collective bargaining unit of the proposed shared-work plan.
(e) A list of the week or weeks within the requested effective
period of the plan during which participating employees are
anticipated to work fewer hours than the number of hours determined
under section 28d(1)(e) due to circumstances listed in subdivision
(c).
(f) The employer's certification that the implementation of a
shared-work plan is in lieu of temporary layoffs that would affect
at least 15% of the employees in the affected unit and would result
in an equivalent reduction in work hours.
(g) The employer's assurance that it will abide by all terms
and conditions of sections 28b to 28m.
(h) The employer's certification that, to the best of his or
her knowledge, participation in the shared-work plan is consistent
with the employer's obligations under federal law and the law of
this state.
(i) Any other relevant information required by the
unemployment agency.
(3) An employer may apply to the unemployment agency for
approval of more than 1 shared-work plan.
Sec. 28d. (1) The unemployment agency shall approve a shared-
work plan only if the plan meets all of the following requirements:
(a) The shared-work plan applies to 1 affected unit.
(b) All employees in the affected unit are participating
employees, except that the following employees shall not be
participating employees:
(i) An employee who has been employed in the affected unit for
less than 3 months before the date the employer applies for
approval of the shared-work plan.
(ii) An employee whose hours of work per week determined under
subdivision (e) are 40 or more hours.
(c) There are no fewer than 2 participating employees,
determined without regard to corporate officers.
(d) The participating employees are identified by name and
social security number.
(e) The number of hours a participating employee will work
each week during the effective period of the shared-work plan is
the number of the employee's normal weekly hours of work reduced by
the reduction percentage.
(f) The plan includes an estimate of the number of employees
who would have been laid off if the plan were not implemented.
(g) The plan indicates the manner in which the employer will
give advance notice, if feasible, to an employee whose hours of
work per week under the plan will be reduced.
(h) As a result of a decrease in the number of hours worked by
each participating employee, there is a corresponding reduction in
wages.
(i) The shared-work plan does not affect the fringe benefits
of any participating employee.
(j) The specified effective period of the shared-work plan is
52 consecutive weeks or less and the benefits payable under the
shared-work plan will not exceed 20 times the weekly benefit amount
for each participating employee, calculated without regard to any
existing benefit year.
(k) The reduction percentage satisfies the requirements of
subsection (2).
(2) The reduction percentage under an approved shared-work
plan shall meet all of the following requirements:
(a) The reduction percentage shall be no less than 15% and no
more than 45%.
(b) The reduction percentage shall be the same for all
participating employees.
(c) The reduction percentage shall not change during the
period of the shared-work plan unless the plan is modified in
accordance with section 28i.
Sec. 28e. The unemployment agency shall approve or disapprove
a shared-work plan no later than 15 days after the date the
unemployment agency receives an employer's shared-work plan
application that meets the requirements of sections 28c and 28d.
The unemployment agency's decision shall be expressed in writing
and, if the shared-work plan is disapproved, shall include the
reasons for the disapproval.
Sec. 28f. (1) A shared-work plan is effective for the number
of consecutive weeks indicated in the employer's application, or a
lesser number of weeks as approved by the unemployment agency,
unless sooner terminated in accordance with section 28j.
(2) The effective period of the shared-work plan shall begin
with the first calendar week following the date on which the
unemployment agency approves the plan.
Sec. 28g. (1) Compensation shall be payable to a participating
employee for a week within the effective period of an approved
shared-work plan during which the employee works the number of
hours determined under section 28d(1)(e) for the participating
employer on the same terms, in the same amount, and subject to the
same conditions that would apply to the participating employee
without regard to sections 28b to 28m, except as follows:
(a) A participating employee shall not be required to be
unemployed within the meaning of section 48 or file claims for
compensation under section 32.
(b) The benefit rate otherwise payable as prescribed in
section 27 shall be modified so that a participating employee shall
be paid compensation in an amount equal to the product of his or
her weekly benefit rate and the reduction percentage, rounded to
the next lower whole dollar amount.
(c) Weeks that a participating employee participates in a
shared-work plan are not weeks of unemployment for purposes of
establishing limits on the duration of receipt of unemployment
benefits under this act, but the dollar amount of benefits received
under the shared-work plan applies toward the maximum amount of
benefits payable.
(d) The unemployment agency shall not deny compensation to a
participating employee for any week during the effective period of
the shared-work plan by applying any provision of this act relating
to active search for work or refusal to apply for or accept work
other than work offered by the participating employer.
(e) A participating employee satisfies the availability and
seeking work requirements of section 28 if the employee is
available for work during the employee's normal work week with the
participating employer.
(f) A participating employee may participate in a training
program to enhance the employee's job skills without becoming
ineligible for benefits under the approved shared-work plan, if the
training is sponsored by the employer or provided under the
workforce investment act of 1998 and the employee's participation
is approved by the unemployment agency.
(2) For purposes of subsection (1), if a participating
employee works fewer hours than the number of hours determined
under section 28d(1)(e) for the participating employer during a
week within the effective period of the approved shared-work plan,
but receives remuneration as if the employee had worked the number
of hours determined under section 28d(1)(e), the employee is
considered to have worked the number of hours determined under
section 28d(1)(e) during that week.
(3) A participating employee's eligibility for compensation
for a week within the effective period of an approved shared-work
plan shall be determined without regard to sections 28b to 28m if
the employee receives remuneration for the week from the
participating employer that is greater than or less than the amount
due for the number of hours determined under section 28d(1)(e).
Sec. 28h. (1) The unemployment agency shall establish a
schedule of consecutive 2-week periods within the effective period
of the shared-work plan. The unemployment agency may, as necessary,
include 1-week periods in the schedule and revise the schedule. At
the end of each scheduled period, the participating employer shall
file claims for compensation for the week or weeks within the
period on behalf of the participating employees. The claims shall
be filed no later than the last day of the week immediately
following the period, unless an extension of time is granted by the
unemployment agency for good cause. The claims shall be filed in
the manner prescribed by the unemployment agency and shall contain
all information required by the unemployment agency to determine
the eligibility of the participating employees for compensation.
(2) The benefits under a shared work plan shall be funded as
follows:
(a) If federal funding is available to this state for the
purpose of full reimbursement for the cost of funding benefits paid
by the unemployment agency pursuant to section 2162 of the layoff
prevention act of 2012 and an approved shared work plan under this
act, those benefits shall not be charged or expensed to a
participating employer. However, the unemployment agency shall not
use that federal funding as a reimbursement for compensation paid
to a claimant under a shared-work plan if the claimant is employed
by the participating employer on a seasonal, temporary, or
intermittent basis. In that case, benefits shall be charged to the
participating contributing employer's chargeable benefits account
or reimbursing payments in lieu of contributions shall be required
from the participating reimbursing employer.
(b) If federal funding is available to this state for the
purpose of partial reimbursement for the cost of funding benefits
paid by the unemployment agency pursuant to an agreement entered
into between this state and the United States department of labor
pursuant to section 2163 of the layoff prevention act of 2012, any
approved shared-work plan shall provide that the employer shall
make a reimbursing payment in lieu of contributions to this state
equal to 1/2 of the benefits paid under the employer's approved
shared-work plan. That payment shall be deposited into this state's
unemployment compensation fund. Benefit payments or deposits made
under this subdivision shall not be used for purposes of
calculating an employer's contribution rate under section 19. The
unemployment agency shall not use federal funding under this
subsection as a reimbursement for compensation paid to a claimant
under a shared work plan if the claimant is employed by the
participating employer on a seasonal, temporary, or intermittent
basis. In that case, benefit payments shall be funded by the
employer as reimbursing payments in lieu of contribution.
(c) If full or partial federal funding is not available as
provided in subdivision (a) or (b), the benefits paid by the
unemployment agency pursuant to an approved shared work plan under
this act shall be charged to the participating contributing
employer's chargeable benefits account or reimbursing payments in
lieu of contributions shall be required from the participating
reimbursing employer.
Sec. 28i. An employer may apply to the unemployment agency for
approval to modify a shared-work plan to meet changed conditions.
The unemployment agency shall reevaluate the plan and may approve
the modified plan if it meets the requirements for approval under
section 28e. If the modifications cause the shared-work plan to
fail to meet the requirements for approval, the unemployment agency
shall disapprove the proposed modifications.
Sec. 28j. (1) The unemployment agency may terminate a shared-
work plan for good cause.
(2) For purposes of subsection (1), good cause includes any of
the following:
(a) The plan is not being executed according to its approved
terms and conditions.
(b) The participating employer fails to comply with the
assurances given in the plan.
(c) The participating employer or a participating employee
violates any criteria on which approval of the plan was based.
(3) The employer may terminate a shared-work plan by written
notice to the unemployment agency.
Sec. 28k. The decision to approve or disapprove a shared-work
plan, to approve or disapprove a modification of a shared-work
plan, or to terminate a shared-work plan is at the unemployment
agency's discretion. Those decisions are not subject to the appeal
provisions of this act.
Sec. 28l. In addition to other reports required by law, the
unemployment agency shall submit to the governor, the secretary of
the senate, and the clerk of the house of representatives for
referral to the chair and minority vice-chair of the appropriate
committees an annual report regarding shared-work plans under
sections 28b to 28m. The report shall include the number of
approved shared-work plans, the number of participating employers,
the number of participating employees, the amount of compensation
and aid to participating employees, and any other information that
the unemployment agency determines is relevant to assess the impact
of shared-work plans on the unemployment compensation fund. The
first report shall be submitted on or before the first day of March
following the first complete calendar year during which sections
28b to 28m are in effect, and subsequent reports shall be submitted
on or before the first day of March of each subsequent year.
Sec. 28m. (1) Notwithstanding any other provision of this act,
if any provision of sections 28b to 28l would otherwise cause the
United States department of labor to withhold the approval required
to implement a shared-work program under section 3304(a)(4)(e) of
the federal unemployment tax act, 26 USC 3304, and section
303(a)(5) of the social security act, 42 USC 503, that provision
does not apply.
(2) When the provisions of this section or sections 28b to 28l
are approved or disapproved by the United States department of
labor, the unemployment agency shall transmit to the secretary of
the senate and the clerk of the house of representatives notice of
the approval or disapproval.
Enacting section 1. This amendatory act takes effect January
1, 2013.
