State Helping Companies Stop Layoffs

‘Shared Work’ Aids Employees & Firms

Gov. Andrew M. Cuomo announced additional reform measures to strengthen the state’s Shared Work program that will help businesses avoid layoffs during short term financial difficulties.

In 2012, employers using the Shared Work program saved 3,280 jobs. So far in 2013, 280 Shared Work plans have been approved saving an estimated 945 jobs.

“Any employer in New York considering layoffs should first contact the state Labor Department to determine how their jobs could be saved,” Cuomo said. “Shared work can be that lifeline, not only for business, but also for employees and their families.”

The Shared Work program gives employers facing short term financial pressures an alternative to layoffs. Rather than lay off workers to cut costs, the program enables employers to reduce a worker’s hours and enable the worker to collect partial un- employment insurance benefits to make up for the lost wages. The program allows workers to keep their health insurance, retirement, vacation pay and other fringe benefits.

The employer, in return, gets to keep the skilled and trained workers and avoids the high cost of re-hiring and re-training new employees when business picks back up.

The changes announced by the governor include:

– increasing the number of weeks an employee can receive partial unemployment benefits from 20 to 26;

– lowering the minimum number of employees a business must have on the payroll to qualify, from five to two; and

– allowing part-time employees to be eligible for the program.

In addition, under the enhancements, employers’ Unemployment Insurance (UI) accounts will not be charged for benefits paid to Shared Work participants and employers’ UI experience ratings will no longer be negatively affected by participating in Shared Work. These changes will save employers money in UI contributions paid. An employer pays more in UI contributions for a poorer rating.

“This program is vital to the future success of businesses here in New York, allowing them to retain their valuable employees when they lose a contract or see a temporary reduction in demand for their product or service,” said Labor Commissioner Peter M. Rivera. “This program will help a business get back on its feet and avoid detrimental layoffs.”

Additional reform measures include:

– With few exceptions, (i.e. seasonal or temporary work), the federal government will be temporarily reimbursing the state for the benefits paid under this program. Through his legislation, the Governor has elected to pass that savings on to the participating New York employers.

– In most cases, retirement and fringe benefits will not be reduced.

– Shared Work employees may participate in employer sponsored training or training funded by the Workforce Investment Act.

Employers from across the state have benefited from the Shared Work job-saving program. In New York City, 100 Shared Work plans were approved in 2012. A total of 925 workers participated, and the State Labor Department estimates that 240 jobs were saved.

Brandon Bolds of Pluribus Products in Brooklyn said: “The Shared Work Program has allowed us as a company to stay open and keep our full staff and operations intact. The aid allows us to save on our overhead, while lessening the financial hit on our employees, who we would have otherwise had to lay off completely or drastically reduce hours.”

To apply for the Shared Work program, employers can call the State Labor Department at 1-518-457-5807 or visit www.labor.ny.gov/sharedwork.

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