Department of Labor examines bus issue

INDIANAPOLIS (WISH) - 24-Hour News 8’s I-Team 8 has learned that the U.S. Department of Labor is investigating whether the state of Indiana has the right to deny bus drivers unemployment benefits.

The new state law says that employees who work at places with planned unpaid vacation can not apply for unemployment during those vacations.

I-Team 8 asked the U.S. Department of Labor about applying that law to bus drivers, and got the following response from department spokesman, Scott Allen: "The entire summer is not a scheduled "vacation" such as when a manufacturing plant schedules a two week lay-off in the summer. We think their [Department of Workforce Development] reading is questionable and will be looking at it."

But some Indiana legislators staunchly defend denying bus drivers unemployment benefits even though all admits the law was largely inspired by manufacturing shutdowns.

Manufacturing was once the engine of the Hoosier economy. But according to some Indiana legislators, running that engine was often costly. That's because plants would routinely schedule short term shut downs. And manufacturing leaders encouraged workers to file for unemployment benefits to fill the payment gap.

"Then the unemployment trust fund would pay for their salaries for a month or two months, however long it took for that to go through. And again the trust fund was not designed to do that," argued Senator Brent Waltz, a supporter of the legislation. "Unemployment benefits are designed for people who find themselves unemployed by no fault of their own - unexpectedly."

Senator Waltz says under the new law, seasonal workers, like bus drivers, who know work will end for a period and resume later, are no longer eligible for benefits.

But drivers point to the law itself that says workers are ineligible when the employer's "regular vacation policy" includes unpaid time off. Durham bus drivers argue the summer is not a vacation.

"They look at it as a layoff because they work year round," said Andi Helm, the staff representative for the American Federation of State, County and Municipal Employees.

Helm points out that Durham provides other services during the summer which means some drivers work year round. Those who don't believe they should collect unemployment.

The drivers point to their contract with Durham that promises to "maintain the practice with regard to summer and break unemployment insurance for employees."

Drivers believe the benefit is a necessity for the drivers - most of whom make less than $20,000 a year.

"I mean it's been a terrible, terrible summer with some of our employees," she said noting that some had been forced into homeless shelter after Indiana's Department of Workforce Development denied their unemployment benefits.

The bus drivers are contesting the DWD's interpretation of the law in court. There are hearings next week. Should their case be appealed to a higher court, the Department of Labor could submit a brief. A federal opinion can carry a great deal of weight. The U.S Department of Labor recently supported bus drivers in a similar case in Georgia.

In an extensive investigation of the Department of Workforce Development, I-Team 8 exposed in February that the unemployment trust fund is $2 billion in the red. The legislature's newly passed bill that denies benefits to seasonal workers is attempting to plug the hemorrhaging fund.