Work sharing (also called short-time compensation) is a special state Unemployment insurance (UI) program that softens the impact of a business downturn on workers, employers and the government. As of June, 2009, a work-sharing program had been adopted by 17 states (see below). Under work sharing, an employer reduces the hours of work for all workers in a firm or a business unit instead of laying off a portion of the workforce. Workers then receive partial UI benefits to help compensate for the lost hours of work.
Benefits of work-sharing
Work sharing is an alternative to layoffs, which reduces the impact of an economic decline on workers, employers and the government. According to the Center for Law and Social Policy, the most significant benefits are that it:
- Helps workers keep their jobs, maintain their benefits and continue to build their skills and experience while the overall labor market is weak.
- Offers distinct advantages for entry-level and less experienced workers who are especially vulnerable if a layoff occurs.
- Enables employers to keep the workforce intact and retain skilled employees, greatly
reducing the costs of recruitment and training when the economy recovers.
- Benefits the government by keeping more people employed and productive.
- New York
- Rhode Island
- To Avoid Layoffs, Some Companies Turn to Work-Sharing - New York Times article, June 15, 2009.