The Unemployment Insurance deal that we signed off on, HB 1379, passed the Indiana Senate by a vote of 46-3 and the Indiana House by a vote of 52-47. Although the bill is not prefect, we believe that is the best deal that we could have possibly got, as all the big items were taken off the table and our industry was not singled out.
The construction industry was the main target of unemployment insurance reform this session! The Senate Republicans wanted to redefine construction workers--especially those working in road construction--as season workers and deny benefits in the winter months. Both the House and the Senate wanted our contractors to be reimbursable employers (i.e. they would have to pay taxes in the exact amount they paid out in benefits, instead of paying the standard tax rates). Both the House and the Senate also wanted to have all employers to pay a one-time surcharge tax to help shore up the bankrupt Unemployment Insurance Trust Fund. The Senate also wanted to cut UI benefits by 25% on average, make people take jobs at well below their pervious wage rates, and take away work search waivers from construction workers.
We worked hard to take the benefits cuts, seasonal worker provisions, and work search waivers off the table. We were successful in all points and actually got affirmative language in the law that says that we are entitled to the work search waivers (before it was just given to us by a matter of policy and could be revoked at any time).
We also worked very hard to ensure that our contractors were treated equally with all other employers in the state of Indiana. It was constantly pointed out by all parties that our contractors are a drain on the system. We were successful in working with our contractors to take the reimbursable employer provisions out of the bill and eliminating the one-time surcharge. From there, it was a matter of determining the tax rates.
The taxable wage base (the maximum dollars an employer pays taxes on per worker) was increased from $7,000 to $9,500 and the highest experience rate was increased from the current 5.6% to 9.5% in 2010 and 10.2% in 2011. That means that the most an employer pays on a single employee is going to increase from the current $392 a year ($7,000 X 5.6%) to $902.50 ($9,500 X 9.5%) in 2010 and $969 ($9,500 X 10.2%) in 2011. Employers with the lowest experience rate will go from $77 a year ($7,000 X 1.1%) to $66.60 a year ($9,500 X 0.7%) in 2010 and $71.25 a year ($9,500 X 0.75%) in 2011. Yes, small employers that do not lay off many people actually get a tax break!
As you may have guessed, many of our contractors will their rates go from 5.6% to 10.2%, but our industry is not singled-out under the plan. The Indiana Chamber and Indiana Manufacturers are as mad as can be that construction contractors were not singled-out and forced to pay higher rates. In fact, they are urging that the bill be vetoed and that the construction industry (workers and contractors alike) be forced to put more skin in the game. It is our understanding that the governor’s folks OK’d the deal and that it will be signed by the governor.
The deal is far from perfect, and we had to make concessions with regard a good number of technical issues, but overall it is acceptable.
Message to Contractors
Collectively, we saved the industry from massive increases! There was an elephant gun pointed at the contractors and they ended up with a bee sting, so don’t look a gift horse in the mouth. They have not been singled out and they know exactly what increases are coming around the corner.
Message to Members
Seasonal workers and reduced benefits are off the table, and we have guaranteed the work search waivers.
Their phone calls, emails, AND FACES AT THE STATE HOUSE helped to put the final deal together.
Thanks to everyone for helping to make this deal come together!
Pete Rimsans
Associate Director
Indiana State Building and Construction Trades Council
1701 W. 18th Street
Indianapolis, IN 46202
Office: (317) 636-0806
Mobile: (317) 513-9071
Fax: (317) 638-1217
