Short-time compensation plan advanced

Employers could avoid permanent layoffs under a bill advanced from general file March 24.

LB559, introduced by Omaha Sen. Heath Mello, would allow employers to establish a short-time compensation plan, which would temporarily provide unemployment benefits to eligible employees. Mello said short-time compensation plans have been shown to benefit both employers and employees.

“Since 2010, nine states have enacted short-time compensation plan legislation,” he said. “It is an option that provides businesses with a valuable tool to prevent layoffs in times of economic downturn.”

A short-time compensation plan must be approved by the state commissioner of labor and detail the number of employees affected by the plan, work hours of each affected employee and the number of employees who would have been laid off.

Employers that provide health and retirement benefits to eligible employees would be required to continue offering the benefits under the plan. Additionally, employers would be prohibited from hiring additional staff while the plan is in effect.

A Business and Labor Committee amendment, adopted 26-0, would ensure that any benefits paid under the bill would not be chargeable to employer accounts. Additionally, employers would not be responsible for reimbursing the Unemployment Compensation Fund for any benefits paid under a short-time compensation plan.

A Mello amendment to the committee amendment, adopted 25-0, would delay implementation of the bill’s provisions until Oct. 1, 2016.

Senators advanced the bill to select file on a 25-0 vote.