Bill would implement short-time compensation program

The Business and Labor Committee heard testimony Feb. 4 on a bill that would adopt an employer short-time compensation program.

LB559, introduced by Omaha Sen. Heath Mello, would create a voluntary program that would allow employers to temporarily reduce normal work hours in lieu of temporary layoffs for designated employees. Employees under a short-time compensation plan would be eligible for partial unemployment insurance benefits.

Mello said short-time compensation programs would benefit both employees and employers. Such programs would help businesses retain their workforce in tough economic times, he said, which would save them the cost of hiring and recruiting new employees.

Additionally, Mello said, preserving jobs would reduce state costs for Medicaid and other social programs that result from unemployment.

James Goddard, a program director for Nebraska Appleseed, testified in support of the bill, saying that about 32 percent of Nebraska workers are considered low-income. Low-income earners who are laid off sometimes have inconsistent work histories that create barriers to new employment, he said, so the bill would provide them some stability.

Commissioner of the Nebraska Department of Labor Catherine Lang testified in opposition to the bill. Federal funds would offset the $12 million cost of implementing the bill until August 2015, she said, but the state would incur any additional costs thereafter.

The committee took no immediate action on the bill.