Some states provide employers with an alternative option to layoffs through plans that allow employees to apply for partial unemployment insurance payments while working reduced hours. So-called "worksharing" (a.k.a. shared work, short-time compensation, work share, etc.) arrangements reduce economic pressures on employers, allowing them to put off reductions in force and allowing employees to maintain a greater share of their original income and benefits. Use of Workshare will affect a company's Unemployment Experience rating, but not as much as a full layoff. See below for more information on states where such programs are available.
Note: Some states refer to these benefits as eligibility for partial benefits for performing part-time work of less than a specified number of hours per week. Contact your state's department of labor unemployment insurance division to receive a complete explanation of rules and conditions.
- District of Columbia and here, email email@example.com
- Nebraska (see page 71, effective 10/1/2016)
- New Hampshire
- New Jersey
- New York
- Rhode Island
- Vermont see short-time compensation
- Virginia (new in 2014)
- Washington state
Note: Some states have waiting or notification periods (e.g. Massachusetts-3 weeks). Louisiana's work share program was never implemented and was repealed in 2014. Oklahoma repealed its program in 2015.
DOL Provides Guidance/Incentives to Operate Workshare Programs
In June 2012, the Dept. of Labor issued a "letter" (not a regulation) providing guidance on expansion of rules and incentives for states to offer "workshare" programs. Many of our members took advantage of this program back in 2009 and 2010 when they reduced the number of hours for employees and the state unemployment compensation program paid a pro-rata benefit. The new guidance modifies some definitions and requires that health insurance and retirement plans be continued.
The changes are meant to comply with the Middle Class Tax Relief and Job Creation Act of 2012. Many states will have to officially change their programs in order to comply with the law. The government is giving states until August 2014 to make needed changes and to take advantage of incentives offer by the federal government.
What are the changes?
- States may modify their programs to allow for pro-rated benefits to be paid when hours are cut from 10-60 percent. States may determine their own range as long as it falls within these parameters. In the past, 20 percent was the norm.
- To allow for greater flexibility, layoffs no longer have to be deemed "temporary" in nature. However, at least two employees must be affected.
- Eligible employees "may participate, as appropriate, in training (including … worker training funded under the Workforce Investment Act of 1998) to enhance job skills if such program has been approved by the State agency."
- Employers will have to certify to the state that it is providing health benefits and retirement benefits to affected employees under the same terms and conditions as though the workweek of such employee had not been reduced. (Note: employers may want to discuss this provision with their plan administrators do determine if a plan change is necessary.)
- The employer will have to submit to the state a written plan describing how the plan is being implemented (including notice and an estimate of the number of full-time layoffs that would have occurred absent the workshare program).