Labor Seal NYS Department of Labor                          

Contact Leo Rosales Cell: 518-281-6167 Office: 518-457-5519 Email: leo.rosales@labor.ny.gov www.labor.ny.gov
LABOR DEPARTMENT URGES STRUGGLING CAPITAL REGION COMPANIES TO USE SHARED WORK PROGRAM, AVERT PERMANENT LAYOFFS
Program Lets Employees Collect UI, Keep Health Benefits on a Reduced Work Schedule

Albany, NY (February 04, 2009) - At a press conference event at Latham International, State Labor Commissioner M. Patricia Smith today urged businesses in the Capital Region struggling with the current economic crisis to use the Department of Labor’s Shared Work Program, which gives employers an alternative to layoffs as they face a temporary decline in business. Rather than lay off a percentage of workers to cut costs, an employer can use this program to reduce the hours of all or a particular group of employees. In turn, employees can receive partial unemployment insurance benefits to compensate for their lost wages. Under the Shared Work program, participating employees do not see a reduction in their health insurance, retirement, vacation pay, or other fringe benefits.

“New York State is facing its most difficult challenges since the Great Depression, and employers need to utilize every advantage offered to help them weather this economic storm,” said Commissioner Smith. “The Shared Work program is truly a win-win for employers and employees. Employers get to retain their workers and avoid painful layoffs, while workers are still able to earn a steady paycheck and retain the benefits depended on by themselves and their families.”

New York is one of 17 states currently utilizing this program, which helps employers avoid some of the burdens that accompany a layoff. In 2008, 462 employers statewide participated, up from 291 in 2007, with 48 programs active in the Capital Region. This translates to 14,775 employees enrolled in Shared Work in 2008, up from 10,300 in 2007, with 1,392 of these in the Capital Region.

If they keep employees during a temporary slowdown, employers can quickly gear up as soon as business conditions improve. This spares the business the expense and delay of recruiting, hiring, and training new employees.

Scott Hollander, Vice President of Human Resources and Quality Assurance at Latham International, which currently has more than 100 employees enrolled in the program, said, “We are in a seasonal business and have implemented many programs to keep our workforce more fully employed. The Shared Work Program has helped us to save millions of dollars by avoiding the costs that often arise with turnover, hiring and training new hires and lost productivity. Shared Work keeps people on the payroll and working; it keeps their skills sharp and their knowledge base strong. In turn, our associates have better job stability, keep their level of productivity high and continue making the best quality products in our industry. Most important for our associates is their ability to maintain a relatively stable take home pay to support themselves and their families.”

Congressman Paul Tonko said, “I applaud Governor Paterson and Labor Commissioner M. Patricia Smith for their work and dedication towards this program. In these dire economic times it is essential that we put forward the most flexible programs to provide both the labor and business community the chance to manage this crisis without incurring record levels of unemployment. Congress, along with the new Obama Administration, is committed to enacting laws that protect American jobs, support workers rights and retraining and retooling our workforce. Cooperation from Governor Paterson and his administration with programs such as the Shared Work Program are a catalyst for our economic recovery.”

The employer must have at least five full-time (35-40 hours/week) employees, and paid (or its predecessor paid) UI tax contributions for at least a year before applying to the Liability & Determination Section at least two weeks before the start of the program.

A Shared Work plan must include:

  • a reduction in work hours between 20 - 60%
  • benefits may not be used to pay existing part-time employees
  • no reduction in fringe benefits
  • no extension beyond 53 weeks
  • approval by the NYSDOL Liability & Determination Section before implementation
  • the employer cannot hire more workers for the group covered by the plan
  • the plan must be in lieu of a layoff of an equivalent percentage of the workforce
  • all employees in an affected unit reduce their hours by the same extent (different units may reduce varying percentages)
  • in union shops, the collective bargaining unit must agree to the Shared Work Program

Employees who would normally qualify for regular unemployment insurance benefits in New York State are eligible to participate in the Shared Work Program. Because Shared Work is an alternative to layoffs, a plan cannot result in payment of more benefits than would have been paid if a total layoff occurred. Under the current Federal Extended Benefits plan, workers who were previously eligible for only 20 weeks of Shared Work benefits may be eligible for up to 40 weeks.

Albany County Executive Mike Breslin said, “I salute Governor Paterson and the Department of Labor for their creative approach to preserving jobs and allowing employers to reduce costs during this economic crisis. The Shared Work Program will allow businesses to reduce costs without layoffs and provide employees the benefits they need for themselves and their families. It is critical we make employers and workers aware of the programs and services available to help them get through these difficult economic times.”

Mark Eagan, President and CEO of the Albany-Colonie Regional Chamber of Commerce said, “It is extremely important that businesses are aware of all the tools available to help get them through tough times. The Shared Work Program is an excellent alternative to layoffs and will allow businesses to maintain their valued employees and ultimately help their bottom line.”

Commissioner Smith continued, “We want businesses in the Capital Region to know that the Department of Labor and its services can be a great asset to them, and the Shared Work program is a prime example of this. We’re promoting this program for one reason – we want more employers struggling under the weight of this economy to sign up for it. Shared Work is unique in the way that it mutually benefits employers, employees and most importantly, the families they go home to every night.”

Currently, the State Labor Department uses a paper application from workers through the employer for the UI claim application and the weekly benefits certification through Shared Work. Within the next three to five weeks, the Department plans to offer participating employees the ability to file their original claim application via the Internet.

Companies can apply for the Shared Work program by referring to:

http://www.labor.state.ny.us/ui/dande/sharedwork1.shtm

In addition, businesses interested in applying for the Shared Work program on behalf of its workers can call (518) 457-5807.