What Is Work Share?
- The Work Share Program is a voluntary program that provides employers facing a decline in business with an alternative to layoffs.
- Work Share helps employers retain their skilled workforce and helps workers maintain their jobs during a downturn in business by reducing hours of work for an entire group of affected employees rather than laying off some while others work full time.
- Work Share provides a portion of weekly unemployment compensation to workers whose work weeks have been reduced.
- Unemployment benefits are based on a percentage of the reduced hours of work and pay. The reduction in work hours must result in an equivalent reduction in wages.
Advantages of Work Share
- Minimizes or eliminates the need for layoffs
- Businesses can reduce employee work hours to reflect decreases in business demand
- Enables a business to retain trained employees and avoid the expense of recruiting, hiring and training new employees when business improves
- Saves money and keeps your skilled workforce intact
- Can be used in almost any type of business or industry
- Employees are spared the hardship of full unemployment and receive more income than if they were fully laid off
Who Can Participate?
Any employer who has a reduction in production, services or other conditions which will cause potential layoffs
Participating employees must:
- Be eligible for regular unemployment benefits
- Be full time employees
- Have earned a sufficient amount of wages in order to establish and unemployment claim and receive Work Share benefits.
Work Share does not apply to seasonal, temporary, or intermittent employment.
- Employers must not hire new employees into the affected work unit nor transfer employees into the unit during the Work Share plan period.
- Employers must not reduce hours of work below the number approved under a plan
- Employers must also adhere to the requirements for employee notification, weekly hours, health and retirement benefits, reporting and administration requirements.
- Employers must maintain the fringe benefits of participating employees and obtain approval, if necessary, from collective bargaining representatives.
- Employers plan should include certification that it has obtained the approval of any applicable collective bargaining unit representative and that is has notified all affected employees who are not in a collective bargaining unit of the proposed shared work plan.
- If the employer will not provide advance notice to workers in the affected unit, the employer must explain in a statement in the application why it is not feasible to provide such notice.
How Will Participating in Work Share Affect My Taxes?
Work Share benefits paid to workers in an affected unit covered by a Work Share plan will be charged against an employer’s UI tax account in the same manner that regular unemployment insurance benefits are charged.
Changing or Ending a Work Share Plan
- An employer may apply for UIA’s approval to modify an approved Work Share plan, if the employer’s circumstances change.
- An employer may terminate an approved Work Share plan by notifying the UIA through their MiWAM account.
- The UIA may terminate an approved plan for good cause.
How Does It Work?
Here’s an example:
A company with 100 employees finds it necessary to lay off 20 people. With a Work Share plan, the employer keeps all 100 employees on the payroll, but reduces their work week from five days to four days (40 hours to 32 hours).
This will achieve the desired 20 percent reduction in payroll; all 100 employees will continue to earn wages for four days and will receive Work Share unemployment benefits for the fifth day.
While weekly benefit rates vary from person to person, if a worker was fully unemployed their weekly benefit amount would be, for example, $360. Under Work Share, a worker whose hours were reduced by 20 percent would receive a $72 Work Share benefit ($360 x 20% = $72).
- Unemployment taxes must be current
- Experience account balance must have “positive” reserve
- Must have paid wages for at least the previous 12 quarters
- Must certify that participation in a Work Share plan is in lieu of layoffs and would result in an equivalent reduction in work hours by at least 15 percent but not more than 45 percent
What Information Will I Need to Apply?
- Describe the affected unit (or units) covered by the plan.
- Include the number of full or part-time workers in the unit and the percentage of workers in the unit covered by the plan.
- Identify each individual employee in the affected unit by name and social security number.
- Provide the employer’s unemployment tax account number
- Provide an estimate of the number of workers who would have been laid off in the absence of the Work Share plan.
Employee Weekly Hours
Employers are required to:
- Identify the usual weekly hours of work for employees in the affected unit.
- Provide the specific percentage by which hours will be reduced during all weeks covered by the plan. The percentage of reduction of hours must be no less than 15 percent and no greater than 45 percent.
- Specify if plan includes a period where employer normally provides no work (such as for a holiday or other plant closings, if applicable).
Details for a Work Share Plan
- You may have more than one plan. Employers can have multiple plans within the organization if each plan covers two or more employees.
- Plans may be approved for a period of up to 52 consecutive weeks.
- You can renew the Work Share plan after it expires. When the plan expires, UIA will notify the employer to renew the plan by submitting a new application.
- You can implement a Work Share plan for one or more departments, shifts, or units. A unit consists of two or more employees. You have the flexibility to specify affected areas.
- You may return individuals or groups to work full time for a week or two and then continue the plan. You have the flexibility to stop or continue as needed.
- You may modify the original plan after reporting any changes to UIA via MiWAM. Substantial changes will be reevaluated for approval.
- The plan must include a description of how workers in the affected unit will be given advance notice of the employer’s participation in the Work Share plan.
- Employers will be required to provide employee information and bi-weekly unemployment certifications for the affected work unit. Participating employees are prohibited from providing unemployment certifications under the Work Share program.