Work Share Programs Gain Traction in States
Jan 19, 2012
By Neil Ridley
Faced with sustained unemployment and a fragile economy, more states are taking steps to ease the impact of layoffs and address the jobs crisis. In January 2012, New Jersey, with overwhelming bipartisan support, became the most recent addition to the ranks of states with work sharing programs, which allow employers to reduce employees' hours instead of slashing the number of employees on their payrolls. In Virginia, a bipartisan group of state senators has introduced a bill to create a work sharing program. A similar effort is underway during Indiana's 2012 legislative session.
Work sharing, also called shared work and short-time compensation, is an option within the federal-state UI system that provides some employers with an alternative to layoffs. For example, a business can reduce employees' hours by 20 percent instead of laying off a portion of the workforce. Eligible employees can receive partial unemployment benefits to make up for lost wages. The program benefits businesses, employees and local economies: businesses retain skilled workers, employees retain their jobs, and communities minimize the number of layoffs during tough times.
Few policy ideas have been as widely supported as work sharing. Six states (Colorado, Maine, New Hampshire, New Jersey, Oklahoma and Pennsylvania) and the District of Columbia have added programs since 2009, bringing the total number of programs to 24. About 20 countries have formal programs and a number of them, including Germany and Canada, ramped up national efforts when the global recession hit.
In July 2011 Sen. Jack Reed and Rep. Rosa DeLauro introduced the Layoff Prevention Act, which would clarify the federal framework for short-time compensation and create new incentives for states to adopt or expand these programs. Ramping up work sharing programs, as the Layoff Prevention Act would do, would have several benefits. It would help stabilize employment and reduce job insecurity in what is still a fragile economy. It would also bolster the unemployment insurance system by giving employers and workers across the country more options for weathering future recessions.
The second session of the 112th Congress is getting underway and the House and Senate face a critical Feb. 28th deadline when the temporary extension of the payroll tax cut, federally funded unemployment assistance and other measures expires. Congress should act soon to extend unemployment assistance through the end of the year and, at the same time, take up the Layoff Prevention Act to support the spread of state work sharing programs.
For more information on work share programs read:
- Work Sharing: An Alternative to Layoffs - Frequently Asked Questions
- Work Sharing - An Alternative to Layoffs For Tough Times