LABOR DEPARTMENT URGES STRUGGLING WESTERN NEW YORK 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 12, 2009) - At a press conference event at New Buffalo Shirt Factory in Clarence, State Labor Commissioner M. Patricia Smith today urged businesses in Western New York 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 88 programs active in the Western New York Region. This translates to 14,775 employees enrolled in Shared Work in 2008, up from 10,300 in 2007, with 4,371 of these in the Western New York 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.
This past month, the value of the Shared Work program became more apparent than ever before for New Buffalo Shirt Factory. After an extraordinarily slow period, in February, the company suddenly experienced a dramatic rise in orders based on the development of new markets and lines of business.
Gregory F. Wall, President & COO, New Buffalo Shirt Factory, had this to say about the benefits of the program: “Had we resorted to a purely conventional layoff during this unprecedented slow period, we would have had to deal with numerous costly start-up issues throughout our operation. Instead, the Shared Work Program offered an ideal way for our company to control our costs, retain our valued employees and keep their skills fresh. In turn, our management team was able to focus on preparation for the future, and most importantly, to effectively respond to our customers’ needs when demand increased. The program has proven to be very successful for New Buffalo Shirt Factory and we are absolutely committed to it based on results demonstrated for our employees, the company and the State of New York.”
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:
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.
Commissioner Smith continued, “We want businesses in Western New York 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.