A little-known program that’s part of Ohio’s unemployment compensation (UC) system could help keep more workers on the job and allow many employers to bring laid-off employees back to work as they ramp up operations.
It’s called Shared Work Ohio, and it’s an example of how government can tackle problems and support working people and employers. Some 511 employers with more than 24,000 workers were already are using it in early May. The program allows employers to avoid layoffs and instead reduce work hours. Workers receive unemployment benefits proportionate to the time they don’t work. They keep their jobs and benefits, while employers retain their staff and avoid hiring and retraining costs when demand recovers.
Shared work is a voluntary program. Here’s how it works: Suppose an employer has 100 workers, and no longer has enough work for 20 of them. Instead of laying those people off, all employees can work four days a week, and receive unemployment benefits covering the day each week they don’t work.
Worksharing could be especially helpful to local governments and other public agencies that otherwise might have to lay off or furlough workers. The Cuyahoga County Public Library put 557 employees on a half-time schedule. Employees receive regular UC benefits that cover the other half of their time. Most will get benefits equal to half of what they would been paid. Under the CARES Act approved by Congress, employees using workshare also qualify for an additional $600 a week through July. If the library instead had laid these workers off, they would get regular unemployment benefits and the additional $600 a week.
Three Highland Heights companies that are part of Heico Aerospace have been using Shared Work Ohio to cover 39 workers since last month. Some are working half-time, while others work 32 hours a week. Heico provides service for aircraft navigation equipment. Demand dropped drastically when the pandemic caused people to stop flying. After laying off a third of its workforce, it still needed to cut back further, and turned to shared work. Workers keep their benefits, notes Terri Moorefield, human resources manager, and when the market turns up, Heico will have the skilled workers it needs, who might be hard to find. “It’s a great program,” she says.
Worksharing can be used to bring workers back from layoff, when an employer may not yet be able to rehire everyone full-time. Take a restaurant that has cut back from 10 workers to two, because it’s running only a carryout business. It could bring back the other eight on a half-time basis, and they would continue to receive unemployment benefits for the time they aren’t working. Over time, the employer could bring everyone back on full-time.
Employers submit their work share plans to the Ohio Department of Job & Family Services for approval. A plan can call for a reduction in hours of between 10% and 50%. As Heico’s experience shows, employers can have more than one shared work plan, and designate different work units for different reductions in hours if an across-the-board reduction would be impractical. They also can modify or terminate a plan during the 52 weeks plans cover.
After a plan is approved workers individually apply for benefits; they must qualify for regular UC benefits to participate. Though part-time workers can be covered under a Shared Work plan, that could exclude some because Ohio’s overly stringent standard requires average earnings of $269 a week. Employees covered under the plans don’t need to seek other jobs. Work hours for employees covered under each plan are reduced by the same amount. More information is available at SharedWork Ohio.
Because of provisions in the CARES Act, the cost to employers of UC benefits under worksharing this year will be the same or possibly less than with regular layoffs.
Between March 15 and May 7, the number of worksharing plans in Ohio skyrocketed from just 67 to 827. But that’s still a small fraction of the employers that could be taking advantage of it.
Although Lt. Gov. Jon Husted has mentioned the program at the governor’s daily briefings, Ohio’s leaders could do more to promote Shared Work. The state should be receiving $2.3 million under the CARES Act to do so. Though it does not fit every employer and every situation, it’s an option that could help keep workers on the job and be a useful tool as employers look for ways to bring operations back.