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The U.S. Department of Labor (DOL) awarded nearly $38 million to 13 states on Jan. 29, 2015, to develop or expand work-sharing programs, also known as short-time compensation programs.
Work-sharing programs enable employers contemplating layoffs to temporarily reduce work hours for a group of employees as an alternative during hard economic times.
Affected workers have a portion of their lost wages supplemented by a percentage of their available unemployment compensation benefits. The programs allow employees to keep their jobs and companies to maintain their workforces.
“Layoffs are painful for everyone involved, so having an opportunity to prevent them helps both employers and workers,” said Labor Secretary Thomas Perez in a news release.
“The purpose of the [work-sharing] program is to save jobs. The program … allows an employer to retain their skilled workers and avoid the expense of recruiting, hiring and training new employees when business demand increases. The program benefits both employers and employees and is a win-win for everyone,” the DOL said.
Arkansas, California, Connecticut, Illinois, Iowa, Massachusetts, Missouri, New Hampshire, New York, Pennsylvania, Rhode Island, Texas and Wisconsin received the DOL grants, which totaled $37,814,386.
Short-time compensation grants were first authorized in 2012. A total of $50,461,663 has been awarded to 17 states. Michigan, Ohio, Oregon, Texas and Washington state previously received funding.
In a 2012 Washington state survey, 850 participating employers were asked to rate their satisfaction with the state’s work-sharing program. Approximately 85 percent rated it as “very positive.” Employers were also asked, “Has the shared-work program helped your business survive the current economic recession?” A total of 68 percent of those same employers responded “yes,” and another 20 percent said “probably.”
Roy Maurer is an online editor/manager for SHRM.
Follow him @SHRMRoy
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