Are you looking for ways to hang on to staff, yet reduce costs? Those goals are not necessarily mutually exclusive if you choose to participate in your state’s workshare program. A workshare program allows your employees to collect some unemployment benefits but continue working part time. Here’s an article from the Center for Law and Social Policy that gives additional detail.
Seventeen states have such programs: Arizona, Arkansas, California, Connecticut, Florida, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Missouri, New York, Oregon, Rhode Island, Texas, Vermont and Washington. For a sample of a workshare law, see Section 1279.5 of California’s unemployment insurance code.
Each state’s program is a little different, but they have common attributes. We’ll use Oregon’s program as an example.
Under Oregon’s program, the employer files a plan with the state saying that it is reducing the hours of 3 or more employees by at least 20%, but not more than 40%. Once the plan is approved, workers who otherwise qualify for unemployment insurance benefits get wages and unemployment. The amount of the unemployment benefit is equal to the percentage reduction in hours. For example, if the employer reduces work hours by 20% (instead of laying off 20% of its workforce), its eligible employees would receive 80% of their regular pay and 20% of what they would normally be entitled to for unemployment.
The benefits are obvious: 1) You get to keep your staff so that you can quickly ramp back up when the economy turns around’; 2) your employees get to keep their jobs rather than being laid off, and they receive replacement wages for a portion of what they have lost; 3) and the State gets to reduce the number of laid off workers. It’s a win-win-win!
Of course, it wouldn’t be fun if there weren’t also some disadvantages: Employers will have higher unemployment insurance tax rates and employees will burn through their unemployment insurance benefits, which might be needed later in case of a complete layoff.
Your state labor department’s website, such as Oregon’s Bureau of Labor and Industries, will get you started on seeing if this program meets your needs. And, of course, we are always available to assist.