Work sharing is an Unemployment Insurance (UI) program that allows an employer to reduce the number of hours an employee works during a week while unemployment compensation makes up some of the difference in income. So, if a company is experiencing less demand for its products and consequently fewer sales and down revenue, it can submit a plan to UI requesting work sharing to cushion the reduced hours for its employees.
Work sharing also allows employers to avoid layoffs and potentially, the loss of critical employees, who might job search in a situation such as a mandatory job furlough. The key to the success of work sharing is the income replacement factor. Learn more from Neil Ridley of the Center for Law and Social Policy: Work Sharing - an Alternative to Layoffs for Tough Times.
An example of work sharing is: the employer needs to schedule employees to work four days (32 hours) a week for six months as an alternative to layoffs. The employer develops a plan and applies to the state UI. If the plan is accepted, employees can then apply and receive a portion of their normal compensation from UI.
Rules and regulations about work sharing vary by state. Currently, just over a third of states offer this work sharing program. During tough economic times, employers’ use of work sharing skyrockets.
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