Work Share Programs
Workshare programs let businesses temporarily reduce the hours of their employees, instead of laying them off during economic downturns. Technically referred to as short time compensation, the goal of worksharing programs is to reduce unemployment.
Worksharing should not be confused with job sharing, which allows two part-time employees to share one full-time job. Instead, worksharing allows a full-time worker's hours to be reduced, in lieu of laying off the worker.
Workshare programs benefit businesses, workers and states. Businesses retain their trained workforce, for easy recall to full-time work when economic conditions improve. Workers keep their jobs instead of being laid off, and collect reduced unemployment benefits to partially replace their lost wages. States save money by paying only partial unemployment claims, instead of paying full benefits to laid-off workers.
Under approved workshare programs, employees qualify for a percentage of unemployment benefits, equal to the percentage by which their hours have been reduced. For example, an employee whose hours are cut by 10 percent would qualify for 10 percent of the state’s established weekly unemployment benefit amount. While that does not fully replace the lost wages, the amount supplements a worker’s income until they are recalled to full-time work.
States With Work Share Programs
as of November 2013
|| Rhode Island
|| New Hampshire
|| New Jersey
|| New York
Federal Grant Funds for Work Share Programs
The Middle Class Tax Relief and Job Creation Act of 2012 provides approximately $100 million in grant funding to states that adopt work share programs that meet two federal requirements. State programs must conform with Section 3306(v) of the Federal Unemployment Tax Act and may not be subject to discontinuation. States that already have work share programs in place may apply for the federal grant funding, if their program conforms to the FUTA requirements.
In order to qualify for federal funding, state work share programs must meet the requirements adopted under Title II of the Middle Class Tax Relief and Job Creation Act, including continuation of employee benefits if they are provided to employees whose hours are not reduced, notice to affected employees, and estimates of the number of layoffs avoided by the reduction in hours.
Workers in a work share program must be available for work while collecting unemployment benefits. The federal requirements allow affected workers to improve their job skills by participating in state-approved workforce training programs during their reduced hours, without affecting their eligibility for unemployment benefits.
States must submit an application to the U.S. Dept. of Labor to request their share of the grant funding. Two-thirds of the grant funds for each state are to be used for promote the plan and enroll businesses in the work sharing program. The remaining one-third of the grant funds will be used to pay unemployment benefits under the program. States have until Dec. 31, 2014, to submit applications for federal funding.
The federal grant funding covers 100 percent of the partial benefits paid out under conforming state work sharing programs for up to three years in states that already have programs. States with existing programs that don’t meet federal requirements may be eligible for federal funding during a two-year transition period.
For states without an existing program, federal funds will cover 50 percent of benefits for up to two years for states that enter into an agreement with the federal government to operate a work sharing program, without enacting a law.
Resources on State Work Share Plans
Links to state plans, statutes or resources:
2013 Legislation on Work Share Programs
During the 2013 legislative session, 10 states introduced legislation establishing work share programs. States that proposed work share programs in 2013 are Hawaii, Illinois, Indiana, Nebraska, New Mexico, North Carolina, Ohio, Virginia, West Virginia and Wisconsin. Wisconsin is the only state to establish a work share program so far this year, with the enactment of A.B. 15. Bills remain active in the Illinois and Ohio legislatures.
Twelve states considered work sharing amendments during the 2013 session. Seven states–Arizona, Arkansas, Minnesota, New Hampshire, Rhode Island, Texas and Washington–modified their work share programs to conform to federal requirements. Four states–California, Oregon, New Jersey and Vermont–considered legislation. Colorado passed a bill eliminating a sunset provision on their work share program.
Articles, Resources and Reports
Articles and Reports: