Should seasonal workers be allowed to collect unemployment benefits on their downtime? The state of Indiana recently passed legislation that prevents seasonal workers from collecting unemployment benefits when they are laid off at the end of the season. Watch Indiana Code Section 22-4-3-5.
Aside from the political and economic issues with this new change in law, this article discusses the new statute, provides practical implications, and addresses problematic issues.
Section 22-4-3-5 of the Indiana Code essentially states that an employee is not unemployed (and therefore not entitled to unemployment benefits) during any time the Department of Workforce Development determines that the employee (1) is on vacation and (2) has not received compensation from the employer for that week due to a written contract between the parties or due to the employer’s regular vacation policy and practice.
One of the exceptions to the above rule is that an employee will be entitled to unemployment benefits if the employee did not have a reasonable guarantee from the employer that employment will be available at the beginning of the next season.
For example, if the employer fires the temp worker in December and tells the worker that there is no guarantee that a job will be available next spring and that the worker will need to reapply for any job with the employer, then it is moot. that the worker would be entitled to unemployment benefits because there is no reasonable security of continued employment.
However, if the employer fires the seasonal worker and tells him that he will be called back in the spring if there is employment, and the employer has engaged in the same practice for the past two years, then the seasonal worker probably will not have entitled to collect unemployment benefits because there was reasonable assurance that he would continue to be employed.
This new approach appears to conflict with the old law. In Fort Wayne Community Schools v. Indiana Division of Employment Security Review Board428 NE2d 1379, 1383-1384 (Ind. Ct. App. 1981), the court held that the employee “had, at best, only hope of reemployment… [and] [t]this is not sufficient to constitute a reasonable guarantee of continued employment…”.
However, the key question presented by the new law is whether or not the employee had any reasonable assurance of continued employment when the employer terminated the seasonal worker.
Another exception to the rule is that the rule does not apply to a worker whose employer fails to comply with a department rule or policy regarding the filing of a notice in connection with separation arising from the vacation period. However, this exception is essentially meaningless because the Department of Workforce Development admits that it has no such rule or policy regarding filing a notice.
In conclusion, the fact that a seasonal worker collected unemployment benefits in the past when he or she was laid off does not mean that the same seasonal worker is entitled to collect unemployment benefits under the new law.