I think that Indiana is making it hard to be a small business owner. Everyone is aware of the outrageous property taxes. These affect the business owner twice, as he is likely a homeowner also. Most people don't know how ridiculously the administrative law judge for the Indiana Department of Workforce Development for Henry County applies the law.
Indiana has an "at will" employment statute. This theoretically means that an employee can quit an employer at any time without penalty and an employer can hire and fire employees at any time. An exception exists that prevents the firing to be based on an act of discrimination such as for race, ethnicity, or religion.
Indiana has gone beyond that to allow unemployment benefits to be awarded to a worker who is not terminated for "just cause". To establish just cause the employer must prove: (1) there was a rule; (2) the rule was reasonable; (3) the rule was uniformly enforced; (4) the claimant knew of the rule; and (5) the claimant knowingly violated the rule.
This all seems very reasonable as it protects the employee from the financial difficulties from being arbitrarily fired without warning or reason. An employer can still terminate someone at will, but that person is entitled to unemployment benefits.
The problem arises when the people involved in this decision making process are biased towards one side or the other or interpret the law in a matter that defies logic or even common sense. Such is the situation for Henry County.
The administrative law judge, Ann Carnes, has taken a very biased and liberal view on who deserves unemployment benefits. The most egregious example of which is where a policeman in New Castle, who was terminated for and admitted to taking a bribe, was granted unemployment benefits. The reasoning was that since the city couldn't prove that every past and current policeman had never taken a bribe, the policy wasn't being uniformly enforced. It didn't matter that all policeman caught taking a bribe were fired.
My own experiences involved an employee being awarded benefits who admitted to having violated a company policy against using cell phones at work. There was one involving an employee who was proven to have violated a company policy against using work computers for personal e-mails. And there is a pending one involving an employee who was fired for being rude to patients and causing them to transfer care to other doctors.
I lost the first two cases. I also fully expect to lose the third as well despite overwhelming evidence in my favor.
The problem this poses for the employer are multi-fold. They involve direct and indirect effects.
Directly, when an ex-employee is granted unemployment benefits, the employers unemployment tax rate goes up. This adds another straw on the small business owner's back.
Indirectly, the employer is less likely to hire full-time employees. Indiana does not grant unemployment benefits to part-time workers. There are therefore less full-time jobs available and therefore less health care benefits available to workers.
Unemployment benefits were created by the federal government in 1935 to form as a social welfare benefit to assist employees who lost their jobs through no fault of their own, e.g. through lay-offs. The requirements were that the worker would continue to actively seek other employment during the 26 week benefit period.
The problem with Indiana's system is that the system permits basically a 26 week partially paid vacation. There is an inappropriate granting of benefits and an inadequate monitoring of people who are receiving unemployment benefits. Many times these people 1) do not report having obtained a job, 2) take a job while being paid under the table, or 3) do not bother to look for a job at all until the benefits period expires.
Indiana would do well to encourage small business owners in these difficult economic times. Those people who abuse the unemployment system as well as those who ignore the problem with it should be aware that if there are fewer employers left in Indiana, there will be fewer opportunities for Hoosiers to obtain full time jobs.
