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

Should seasonal workers be allowed to collect unemployment benefits during their downtime? The state of Indiana recently passed legislation that prohibits seasonal workers from receiving unemployment benefits when laid off at the end of the season. Watch Section 22-4-3-5 of the Indiana Code.

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

Section 22-4-3-5 of the Indiana Code essentially states that an employee is not unemployed (and therefore not entitled to unemployment benefits) during any time the Department of Workforce Development determines that the employee is employee (1) is on vacation and (2) has not received compensation from the employer during that week due to a written contract between the parties or due to 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 did not have reasonable assurance from the employer that they will have a job available at the beginning of the following season.

For example, if the employer fires 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 have to reapply for any job with the employer, then it is moot . that the worker would be entitled to unemployment benefits because there is no reasonable guarantee that he will continue in employment.

However, if the employer fires the seasonal worker and tells you that they will call you back in the spring if there is employment, and the employer has practiced the same practice for the past two years, then the seasonal worker will probably not be entitled to collect unemployment benefits because there was a reasonable guarantee that your employment would continue.

This new approach seems to conflict with the previous law. On Fort Wayne Community Schools v. Indiana Occupational Safety Division Board of Review, 428 NE2d 1379, 1383-1384 (Ind. Ct. App. 1981), the court held that the employee “had, at best, only hope of being reemployed … [and] [t]this is not sufficient to constitute a reasonable guarantee of continued employment … “.

However, the key question that arises with the new law is whether or not the employee had any reasonable assurance that they would continue in the job when the employer fired the seasonal worker.

Another exception to the rule is that the rule does not apply to a worker whose employer does not comply with a rule or department policy regarding the filing of a notice regarding separation arising from the vacation period. However, this exception is essentially insignificant because the Department of Workforce Development admits that it has no such rule or policy regarding the filing of a notice.

In conclusion, the fact that a temporary worker collected unemployment benefits in the past when they were laid off does not mean that that same temporary worker will be entitled to collect unemployment benefits under the new law.

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