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 SOUTHERN TIER 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) - Deputy Commissioner Nancy Dunphy, speaking on behalf of State Labor Commissioner M. Patricia Smith, today urged businesses in the Southern Tier 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.

Commissioner Smith is urging struggling companies statewide to avail themselves of the Shared Work program. “ 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 M. Patricia 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 42 programs active in the Southern Tier. This translates to 14,775 employees enrolled in Shared Work in 2008, up from 10,300 in 2007, with 942 of these in the Southern Tier.

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.

The Raymond Corporation, located in Greene, is participating in the Shared Work program. “The Raymond Corporation has a long history of strong business performance and market share leadership. Unfortunately, the current economic conditions have finally caught up to and are having a significant impact on our industry,” said Stephen VanNostrand, vice president of human resources at the firm. “The Shared Work Program has given us the opportunity to keep our highly trained and talented employees together to be ready for improved business conditions while sparing them the hardships of total unemployment. This program has been very well received by our people. Shared Work is one of the tools that we are leveraging to make sure that Raymond comes out of this recession as an even stronger company than we were before the economic downturn.”

To participate in the program, an 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.

“ New York State  needs to put our businesses and their employees first, especially in today’s troubled economic times,” State Senator Tom Libous said. “Whether it’s fighting new taxes on health insurance, or keeping skilled workers employed through programs like the DOL’s Shared Work, revitalizing our economy starts with maintaining our workforce.”

“I appreciate the efforts of Commissioner Smith and the Department of Labor to promote the Shared Work program to employers here in the Southern Tier and throughout New York State,” said Assemblywoman Donna Lupardo (D-Endwell). “In tough times like these it’s important for employees to be able to retain their jobs, as well as their health insurance. Programs like this will help give businesses and families a leg-up as we work together to pull through the recession.”

“During these tough economic times, we are fortunate to have win-win programs such as the shared work program, which retains jobs and provides local industries with the ability to preserve skilled laborers while weathering market instability,” said County Executive Barbara Fiala.

Lou Santoni, President and CEO of the Greater Binghamton Chamber of Commerce, said, “We know our economy will come through this recession. In the meantime, programs like Shared Work give businesses flexibility to manage tough times and be ready for the rebound.”

Commissioner Smith continued, “We want businesses in the Southern Tier 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.