In 2012, the Middle-Class Tax Relief and Job Creation Act of 2012 allotted $100 million in grant funding to states adopting Work Share Programs functioning within FUTA requirements. It was at this time that a trend was started of alternative layoff procedures across the country. As of 2018, 25 states have active work share programs. But despite its abundance, many employers don’t know of work share benefits and wonder, “Is a work share program right for me?”

What is Work Share?

In its simplest form, Work Share is an alternative to laying off employees in the event of downed business. After a plan is proposed and approved by the appropriate state legislature, the employer will proportionally cut the hours of employees within one department of a business. Employees with cut hours have their cut income supplemented by unemployment benefits until the business can return the employees back to full-time work.

Is this right for my business?

There are quite a few benefits to both the employer and the employee when participating in a work share program. The first benefit is that the employer maintains their trained and experienced workforce through periods of low business. Also, the employer avoids having to pay any additional costs to rehire employees when business picks back up. In the interim, employees continue to work their jobs with little deduction in pay versus losing a job entirely.

When considering a work share program, there a few things which a business should consider before implementing a work share plan. In many states with work share programs, it is required that employees who once worked full-time with benefits, continue to receive their benefits through the work share period.  Also, unlike unemployment programs like DUA, paid-work share unemployment benefits are no different from standard unemployment benefits and will affect your tax rating.

For some businesses experiencing a decrease in business, work share programs can be a great alternative to layoffs. Contact your Account Executive today to discuss how work share programs can be implemented in your business and obtain a copy of our Work Share Guide.

 


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