Workzone: Pa. Gets on Work-Sharing Bus

April 09, 2012 | Pittsburgh Post-Gazette |  Link to article

Pennsylvania is joining a growing number of states in tweaking its jobless benefits program in an effort to avert layoffs.

The state's Department of Labor and Industry recently posted rules for a shared-work program that was part of a broader workers compensation measure approved by state lawmakers last year. Under the program, if companies reduce the hours for all workers on a shift or in a department by the same percentage, employees will receive unemployment benefits based on that percentage.

Say a worker who is paid $400 for a 40-hour week has his hours reduced by 20 percent. That person would be paid $320 by the employer and receive $80 in employment benefits, based on information on the department's website.

Pennsylvania joins 22 other states and the District of Columbia in adopting work-sharing, which is a way to keep more workers on the job during economic downturns, said Neil Ridley, a senior policy analyst with the Center for Law and Social Policy in Washington, D.C.

Mr. Ridley said California adopted the first work-sharing program in the 1970s and the concept has gradually gathered steam since then. Since 2009, Colorado, Maine, New Hampshire, New Jersey, Oklahoma and Pennsylvania have instituted programs.

The payroll tax cuts and jobless benefits package signed into law in February by President Barack Obama, a Democrat, provides up to $500 million in estimated incentives for more states to offer the plan, Mr. Ridley said.

Under Pennsylvania's program, employers will have to complete a Department of Labor and Industry application and certify they are cutting hours across the board as an alternative to laying off 10 percent or more of the work force, said Philip K. Miles III, a State College attorney who specializes in employment law. All the workers on the same shift or in the same department must have their hours reduced by the same amount, he said.

States that have adopted work-share programs set their own limits on how long workers can collect benefits and on how much hours must be cut, Mr. Ridley said.

In Pennsylvania, employers must reduce hours by at least 20 percent but by no more than 40 percent. Mr. Miles said workers covered by the program can collect jobless benefits for up to 52 weeks. They will not be able to collect benefits that long if they previously collected unemployment and their eligibility expires while they are on work-share, he said.

At unionized companies where workers are covered by collective bargaining agreements, the union's bargaining representative must sign a form consenting to reducing everyone's hours instead of laying off select people. It is not clear how unions will make that decision. Mr. Miles said that is an issue unions might want to address when they negotiate contracts.

The new federal money will be used in two ways, according to Mr. Ridley.

States with shared-work programs that meet federal requirements will be reimbursed dollar-for-dollar for benefits paid under their programs. States without work-share programs but that adopt temporary measures that meet federal requirements will recover 50 cents for every $1 of work-share jobless benefits they pay, he said.

The federal requirements will be contained in rules that the U.S. Department of Labor will write to implement the measure signed by the president in February, Mr. Ridley said.

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