Work Sharing: An Alternative To Layoffs In Tough Economic Times

July 28, 2009

At this time of high unemployment, work sharing could help some employers avoid layoffs.

The federal-state Unemployment Insurance work sharing program allows employers to temporarily cut costs by reducing the number of regularly scheduled work hours for the entire workforce or business unit. For example, a firm faced with declining demand for its products or services could reduce the hours for all workers by 20 percent instead of laying off 20 percent of its workforce. In a typical state program, employees work four days a week, receive Unemployment Insurance benefits for the fifth day and retain employer-provided health and retirement benefits. 

Work sharing is most useful for companies and industries in which it is possible to reduce hours and modify work schedules. It is a tool to respond to falling demand, but it is not designed to avert a permanent layoff or plant closing.

Currently, only 17 states have work sharing programs. Read Work Sharing: An Alternative to Layoffs in Tough Economic Times to learn more and to view CLASP's policy recommendations for improving and broadening the work sharing program.

 

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