Changes in Indiana Employment Law: Seasonal Workers No Longer Entitled to Unemployment Benefits

Should seasonal workers be allowed to collect unemployment benefits in their downtime? The State of Indiana recently passed legislation precluding seasonal workers from collecting unemployment benefits when they are laid off at the end of the season. See Indiana Code Section 22-4-3-5.

Aside from the political and economical issues with this new change in the law, this article discusses the new statute, provides practical implications, and addresses problematic issues.

Indiana Code Section 22-4-3-5 essentially provides that an employee is not unemployed (and thus not entitled to unemployment benefits) during any time that the Department of Workforce Development finds that the employee (1) is on vacation and (2) has not received compensation from the employer for that week because of either a written contract between the parties or because of 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 had no assurance from the employer that he or she will have employment available at the start of the following season.

For example, if the employer lays off the seasonal worker in December and tells the worker that there is no guarantee that a job will be available the following spring and that the worker would need to reapply for any job with the employer, then it is arguable that the worker would be entitled to unemployment benefits because there is no assurance of continued employment.

However, if the employer lays off the seasonal worker and tells the worker that he or she will be called back in the spring if there is employment, and the employer has engaged in the same practice for the past couple of years, then the seasonal worker will probably not be entitled to collect unemployment benefits because there was a assurance of continued employment.

This new approach seems to conflict with past law. In Fort Wayne Community Schools v. Review Board of the Indiana Employment Security Division, 428 N.E.2d 1379, 1383-1384 (Ind. Ct. App. 1981), the court held that the employee “had, at most, only a hope of being reemployed… [and] [t]his is not enough to constitute a assurance of continued employment… “.

Nonetheless, the key question that is presented with the new law is whether or not the employee had any assurance of continued employment when the employer laid the seasonal worker off.

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 admittedly has no such rule or policy regarding the filing a notice.

In conclusion, just because a seasonal worker collected unemployment benefits in the past when he or she was laid off, does not mean that that same seasonal worker will be entitled to collect unemployment benefits in light of the new law.

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