LABOR DEPARTMENT URGES STRUGGLING NORTH COUNTRY 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) - State Labor Commissioner M. Patricia Smith today urged businesses in the North Country 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 11 programs active in the North Country. This translates to 14,775 employees enrolled in Shared Work in 2008, up from 10,300 in 2007, with 454 of these in the North Country.
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 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.
City of Plattsburgh Mayor Donald Kasprzak said, “The Shared Work Program continues to be a very important alternative for local businesses in these difficult economic times. As we continue to deal with these financial challenges, I appreciate the efforts of the staff of OneWorkSource in assisting our local companies and their employees.”
Susan Matton, Vice President for Economic Development, Plattsburgh-North Country Chamber of Commerce said, “The Shared Work program can be an excellent way for businesses to retain valuable employees and for employees to keep their jobs during temporary business downturns. The program is good for business, good for workers and good for the economy of the North Country. In these challenging economic times, resources like the Shared Work Program are particularly helpful.”
John VanNatten, chair of the North Country Regional Workforce Investment Board said, “Employers participating in the program are able to maintain continuity in their skilled workforce. Meanwhile, employees retain their health and retirement benefits. At a time when a number of companies are temporarily streamlining their operations in a tight economy, we believe the Shared Work Program offers a valuable alternative for our region’s employers and its employees."
Paul Grasso, executive director of the North Country Regional Workforce Investment Board said, “The Shared Work Program saves an employer money by lowering their payroll costs while they retain a skilled workforce,” said. “On the flipside, employees are spared the hardships of full unemployment. It’s one of the best programs the state has ever offered.”
Larry Richards, President of the United Steelworkers Local 420-A, who represents the hourly workers at the Alcoa West Plant in Massena, New York is in full support of the Department of Labor's Shared Work Program. The plant announced several weeks ago their intent to go to a 32 hour work week. Approximately 140 employees were affected. “Once the union had details of the program we took the information to the plant HR Manager and together we have applied for this benefit. It will help our members through these difficult times,” Richards said.
Commissioner Smith continued, “We want businesses in the North Country 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.