Josh Richardson Updates Indiana Small Business about UI Fund Balance, Workshare
Josh Richardson, Chief of Staff to Commissioner Fred Payne with the Department of Workforce Development discussed Unemployment Insurance with Indiana small business owners at a recent Leadership Council meeting.
Richardson said Indiana’s trust fund for unemployment insurance was $1.6 billion dollars before the pandemic hit in March. However, Indiana now has a $1.3 billion gap. The state has borrowed $60 billion from the federal government.
There is good news, however. Indiana’s unemployment rate is down to 6.2% from the peak of 17% at the worst of the pandemic.
Richardson said that ultimately, employers are going to have to build the fund up since employers are the sole funders of the UI program. Employees do not pay into the system. When asked if the rates that small business owners pay will go up, Richardson said that it is too soon to tell.
Indiana does have money from the CARES Act that it could use to pay down the federal loan to the Unemployment Insurance Trust Fund, however, Gov. Holcomb has not decided if that’s the route he is going to take just yet.
Something else that the governor could do with the CARES Act money is to establish a Workshare program. That’s a program where employers can temporarily reduce the hours their employees work and use money from the program to pay their full salary. However, Richardson said that less than 1% of claims filed during the pandemic were from Workshare programs in other states that have already implemented that program. Richardson also added that while CARES money could be used to start up a Workshare program here in Indiana, it does not pay for the staff who would then be needed to run the program.
NFIB members opposed Workshare in a 2017 member ballot, however, Indiana NFIB is going to ask the question again to see how small business owners in Indiana feel about the issue in 2020.