More States Adopt Work Share Programs

Jun 30, 2011

With unemployment still too high, more states have recognized the need to implement innovative solutions to the jobs crisis. Work sharing, a special Unemployment Insurance (UI) program, is steadily gaining acceptance as a viable alternative to layoffs.

In recent months, Maine and Pennsylvania, with overwhelming bipartisan support, joined 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 Maine, a work sharing bill passed with widespread support in the House and Senate and became law without the governor’s signature. In Pennsylvania, Gov. Tom Corbett signed a broad unemployment measure that created a work sharing program.

Work sharing, also called short-time compensation, is an option within the federal-state UI system that provides some employers with an alternative to layoffs in some situations. For example, a business can reduce employees’ hours by 20 percent instead of laying off a portion of the workforce. Workers then receive partial UI benefits to help compensate for lost work hours. 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.

Since 2009, five states (Colorado, Maine, New Hampshire, Oklahoma and Pennsylvania) and the District of Columbia have enacted work sharing laws, bringing the total number of programs to 23. Policymakers at the federal level also recognize the promise of work sharing. President Obama’s FY 2012 budget includes a proposal to expand use of these programs. Sen. Jack Reed and Rep. Rosa L. DeLauro have introduced legislation to encourage state adoption.

CLASP has recommended greater use of work sharing as an alternative to layoffs. In a policy brief (Work Sharing: An Alternative to Layoffs in Tough Economic Times) released in March 2009, CLASP urged more states to adopt the program and asked Congress to address limitations of the federal law that provides a framework for state programs. Recently, three national organizations published reports citing the program’s benefits and calling for an expansion at a time of labor market weakness.