Legislation filed this week by Rep. Cutler would improve and promote the Commonwealth's existing WorkShare program, which allows businesses to avoid layoffs during an economic downturn. Employers are able to save costs by reducing employee hours, while workers receive partial unemployment benefits to cover the resultant loss of income.
The program benefits all parties. Workers keep their jobs and maintain access to health insurance and other employment-based benefits. Employers are able to retain their trained staff during a period of contraction and avoid the difficulty of trying to recruit, hire, and train new people when business improves. Last, the state benefits by limiting volatility in the overall economy and reducing costs borne to the unemployment insurance trust fund.
Though it has proven a successful program, WorkShare is often underutilized and not always well understood. A Commission that reviewed our state UI system last term recommended that EOLWD create a strategy to better promote WorkShare.
This legislation accomplishes that and also create more flexibility by allowing DUA to temporarily waive certain eligibility requirements to expand access to more businesses during an economic downturn. As an example, the department would be able to temporarily allow employers which have made heavier use of the unemployment system in the past, and thus have negative experience ratings, to create an eligible WorkShare plan.
The bill would also:
• Raise awareness by requiring EOLWD conduct a public information campaign for businesses
• Require annual data reporting on WorkShare use in the Commonwealth
• Establish a commission to further study the issue of workshare and best practices to reduce barriers to entry and expand program take-up among employers and present recommendations