HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR
HOUSE BILL 325
51st legislature - STATE OF NEW MEXICO - first session, 2013
AN ACT
RELATING TO UNEMPLOYMENT; ALLOWING EMPLOYERS TO REDUCE WORK HOURS OF CERTAIN EMPLOYEES IN LIEU OF LAYOFFS; ALLOWING CERTAIN EMPLOYEES TO COLLECT UNEMPLOYMENT BENEFITS IN PROPORTION TO A REDUCTION OF WORK HOURS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Unemployment Compensation Law is enacted to read:
"[NEW MATERIAL] SHORT-TIME COMPENSATION PROGRAM--CREATION--PLAN.--
A. As used in this section:
(1) "affected unit" means a specified plant, department, shift or other definable unit to which an approved short-time compensation plan applies;
(2) "health and retirement benefits" means employer-provided health benefits and retirement benefits under a defined benefit pension plan as defined in Section 414(j) of the Internal Revenue Code of 1986 or contributions under a defined contribution plan as defined in Section 414(i) of the Internal Revenue Code of 1986, which are incidents of employment in addition to the cash remuneration earned;
(3) "plan" means a short-time compensation plan submitted by an employer, for approval by the secretary, under which the employer requests the payment of short-time compensation to employees in an affected unit of the employer to avert layoffs;
(4) "program" means the short-time compensation program;
(5) "short-time compensation" means the unemployment benefits payable to employees in an affected unit under an approved plan, as distinguished from the unemployment benefits otherwise payable under the unemployment compensation provisions of a state law;
(6) "unemployment compensation" means the benefits payable under the Unemployment Compensation Law other than short-time compensation and includes any amounts payable pursuant to an agreement under any federal law providing for compensation, assistance or allowances with respect to unemployment; and
(7) "usual weekly hours of work" means the usual hours of work for full-time or part-time employees in the affected unit when that unit is operating on its regular basis, not to exceed forty hours and not including hours of overtime work.
B. An employer wishing to participate in the "short-time compensation program" shall submit a signed written plan to the secretary for approval. The secretary shall develop an application form to request approval of a plan and an approval process. The application shall include:
(1) the affected unit covered by the plan, including the number of full-time or part-time employees in such unit, the percentage of employees in the affected unit covered by the plan, identification of each individual employee in the affected unit, each employee's social security number, the employer's unemployment tax account number and any other information required by the secretary to identify plan participants;
(2) a description of how employees in the affected unit will be notified of the employer's participation in the plan if such application is approved, including how the employer will notify those employees in a collective bargaining unit as well as any employees in the affected unit who are not in a collective bargaining unit. If the employer will not provide advance notice to employees in the affected unit, the employer shall explain in a statement in the application why it is not feasible to provide such notice;
(3) a requirement that the employer identify the usual weekly hours of work for the employees in the affected unit and the specific percentage by which their hours will be reduced during all weeks covered by the plan. An application shall specify the percentage of reduction for which a short-time compensation application may be approved, which shall be not less than ten percent and not more than sixty percent. If the plan includes any week for which the employer regularly provides no work, due to holiday or other plan closing, then such week shall be identified in the application;
(4) certification by the employer that if the employer provides health and retirement benefits to an employee whose usual weekly hours of work are reduced under the program, the benefits will continue to be provided to employees participating in the program under the same terms and conditions as though the usual weekly hours of work of such employee had not been reduced or to the same extent as other employees not participating in the program. For defined benefit retirement plans, the hours that are reduced under the plan shall be credited for purposes of participation, vesting and accrual of benefits as though the usual weekly hours of work had not been reduced. The dollar amount of employer contributions to a defined contribution plan that are based on a percentage of compensation may be less due to the reduction in the employee's compensation. Notwithstanding these requirements, an application may contain the required certification when a reduction in health and retirement benefits scheduled to occur during the duration of the plan will be applicable equally to employees who are not participating in the program and to those employees who are participating;
(5) certification by the employer that the aggregate reduction in work hours is in lieu of layoffs, whether temporary, permanent or both. The application shall include an estimate of the number of employees who would have been laid off in the absence of the plan;
(6) agreement by the employer to:
(a) furnish reports to the secretary relating to the proper conduct of the plan;
(b) allow the secretary or the secretary's authorized representatives access to all records necessary to approve or disapprove the plan application, or, after approval of a plan, to monitor and evaluate the plan; and
(c) follow any other directives that the secretary deems necessary for the division to implement the plan and that are consistent with the requirements for plan applications;
(7) certification by the employer that participation in the plan and its implementation is consistent with the employer's obligations under applicable federal and state laws;
(8) the effective date and duration of the plan that shall expire not later than the end of the twelfth full calendar month after the effective date of the plan; and
(9) any other provision added to the application by the secretary that the United States secretary of labor determines to be appropriate for purposes of a program.
C. The secretary shall approve or disapprove a plan in writing within thirty days of its receipt and promptly communicate the decision to the employer. A decision disapproving the plan shall clearly identify the reasons for the disapproval. The disapproval shall be final, but the employer shall be allowed to submit another plan for approval not earlier than thirty days from the date of the disapproval.
D. A plan shall be effective on the date that is mutually agreed upon by the employer and the secretary, which shall be specified in the notice of approval to the employer. The plan shall expire on the date specified in the notice of approval, which shall be either the date at the end of the twelfth full calendar month after its effective date or an earlier date mutually agreed upon by the employer and the secretary. However, if a plan is revoked by the secretary, the plan shall terminate on the date specified in the secretary's written order of revocation. An employer may terminate a plan at any time upon written notice to the secretary. Upon receipt of such notice from the employer, the secretary shall promptly notify each member of the affected unit of the termination date. An employer may submit a new application to participate in another plan at any time after the expiration or termination date.
E. The secretary may revoke approval of a plan for good cause at any time, including upon the request of any of the affected unit's employees. The revocation order shall be in writing and shall specify the reasons for the revocation and the date the revocation is effective. The secretary may periodically review the operation of each employer's plan to ensure that no good cause exists for revocation of the approval of the plan. Good cause shall include, but not be limited to, failure to comply with the assurances given in the plan, unreasonable revision of productivity standards for the affected unit, conduct or occurrences tending to defeat the intended and effective operation of the plan and violation of any criteria on which approval of the plan was based.
F. An employer may request a modification of an approved plan by filing a written request to the secretary. The request shall identify the specific provisions proposed to be modified and provide an explanation of why the proposed modification is appropriate for the plan. The secretary shall approve or disapprove the proposed modification in writing within thirty days of receipt and shall promptly communicate the decision to the employer. The secretary may approve a request for modification of the plan based on conditions that have changed since the plan was approved; provided that the modification is consistent with and supports the purposes for which the plan was initially approved. A modification does not extend the expiration date of the original plan, and the secretary shall promptly notify the employer whether the plan modification has been approved, and, if approved, the effective date of the modification. An employer is not required to request approval of a plan modification from the secretary if the change is not substantial, but the employer must report every change to the plan to the secretary promptly and in writing. The secretary may terminate an employer's plan if the employer fails to meet this reporting requirement. If the secretary determines that the reported change is substantial, the secretary shall require the employer to request a modification to the plan.
G. An individual is eligible to receive short-time compensation with respect to any week only if the individual is monetarily eligible for unemployment compensation, not otherwise disqualified for unemployment compensation and:
(1) during the week, the individual is employed as a member of an affected unit under an approved plan, which was approved prior to that week, and the plan is in effect with respect to the week for which short-time compensation is claimed;
(2) notwithstanding any other provisions of the Unemployment Compensation Law relating to availability for work and actively seeking work, the individual is available for the individual's usual hours of work with the short-time compensation employer, which may include, for purposes of this section, participating in training to enhance job skills that is approved by the secretary or worker training funded under the federal Workforce Investment Act of 1998; and
(3) notwithstanding any other provision of law, the individual covered by a plan is deemed unemployed in any week during the duration of the plan if the individual's remuneration as an employee in an affected unit is reduced based on a reduction of the individual's usual weekly hours of work under an approved plan.
H. The short-time compensation weekly benefit amount shall be the product of the regular weekly unemployment compensation amount for a week of total unemployment multiplied by the percentage of reduction in the individual's usual weekly hours of work.
I. An individual may be eligible for short-time compensation or unemployment compensation, as appropriate, except that an individual shall not be eligible for combined benefits in any benefit year in an amount more than the maximum benefit amount established for regular unemployment compensation, nor shall an individual be paid short-time compensation benefits for more than fifty-two weeks under a plan. The short-time compensation paid to an individual shall be deducted from the maximum benefit amount of regular unemployment compensation established for that individual's benefit year.
J. Provisions applicable to unemployment compensation claimants shall apply to short-time compensation claimants to the extent that they are not inconsistent with short-time compensation provisions. An individual who files an initial claim for short-time compensation benefits shall receive a monetary determination.
K. The following provisions apply to individuals who work for both a short-time compensation employer and another employer during weeks covered by the approved plan:
(1) if the combined hours of work in a week for both employers does not result in a reduction of at least ten percent of the usual weekly hours of work with the short-time employer, the individual shall not be entitled to short-time compensation benefits;
(2) if the combined hours of work for both employers results in a reduction equal to or greater than ten percent of the usual weekly hours of work for the short-time compensation employer, the short-time compensation benefit amount payable to the individual is reduced for that week and is determined by multiplying the weekly unemployment benefit amount for a week of total unemployment by the percentage by which the combined hours of work have been reduced by ten percent or more of the individual's usual weekly hours of work. A week for which benefits are paid under this provision shall be reported as a week of short-time compensation; and
(3) if an individual worked the reduced percentage of the usual weekly hours of work for the short-time compensation employer and is available for all usual hours of work with the short-time compensation employer, and the individual did not work any hours for the other employer, either because of the lack of work with that employer, or because the individual is excused from work with the other employer, the individual shall be eligible for short-time compensation for that week.
L. An individual who is not provided any work by the short-time compensation employer during a week, but who works for another employer and who is otherwise eligible, may be paid unemployment compensation for that week subject to the disqualifying income and other provisions applicable to claims for regular compensation. An individual who is not provided any work by the short-time compensation employer or any other employer, and who is otherwise eligible for unemployment compensation, shall be eligible for the amount of regular unemployment compensation for which the individual would otherwise be eligible.
M. Short-time compensation shall be charged to contributing employers in the same manner as unemployment compensation is charged under the Unemployment Compensation Law. Employers liable for payments in lieu of contributions shall have short-time compensation attributed to service in their employ in the same manner as unemployment compensation is attributed. Contributing and reimbursable employers shall be relieved of any short-time compensation benefit charges with respect to short-time compensation benefits that are subject to one hundred percent reimbursement from the federal government.
N. An individual who has received all of the short-time compensation or combined unemployment compensation and short-time compensation available in a benefit year shall be considered an exhaustee for extended benefits and, if otherwise eligible under those provisions, shall be eligible to receive extended benefits.
O. If the United States secretary of labor determines that a provision of this section does not comply with federal law or rules of the United States department of labor, the remainder of the section or its application to other situations or persons shall not be affected."
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