State Adopts Shared-Work Program
SharedWork Ohio, a legislative initiative designed to help employers and workers by preventing layoffs, went into effect in mid-July. The law gives employers the ability to reduce the number of hours worked by employees in lieu of layoffs, and employees can collect federally funded unemployment benefits to help cover the loss of the hours.
Sponsored by Representatives Mike Duffey, R-Worthington, and Gary Scherer, CPA, R-Circleville, the law provides Ohio employers with a new tool to keep their workforce intact during downturns. This new flexibility will help employers avoid costly rehiring and retraining when demand returns. At the same time, employees will be able to keep working and retain their health and retirement benefits.
Half the states and the District of Columbia have enacted shared-work policies. Ohio’s version contains a benefit for employers not available in other states: it provides that employers opting for the shared-work approach can avoid a major increase in their unemployment insurances premium rates.
The Ohio Department of Job and Family Services will administer and promote the program. Employers wishing to participate in the program must submit a plan to the department. The plan must include, among other things, a description of the manner in which the employer will implement the requirements of the program, as well as a proposed reduction percentage that must be between ten percent and fifty percent.
Employees of participating employers will not be required to meet the ability to work, availability for work and work-search requirements applicable to standard unemployment benefits in order to receive shared-work compensation. The plan cannot be applied to seasonal, temporary or intermittent employees.
The state can draw on $3.7 million in federal funds to cover startup costs, and the federal government will cover nearly all of the costs for unemployment benefits through August 2015.