What is the SharedWork Program?
by Colleen Malmassari, SHRM-CP, PHR
The SharedWork program, officially called short-time compensation (STC), is an unemployment insurance program that preserves both employees and employers during times of low economic activity.
How Does it Work?
If an employee is experiencing a portion of lost wages due to an economic downturn, it allows them to collect a percentage of their unemployment compensation benefits.
For employers, it serves as an alternative to layoffs in the face of reduced available work hours.
What are the Benefits?
For employers, the program gives the ability to preserve relationships with employees and avoid costs and other resources associated with retraining.
When businesses were forced to close during the beginning of the COVID-19 pandemic, more than one million workers in Washington filed for unemployment and a large number of workers and their family lost their employee-based health insurance. This program allows workers to keep their employment status, their current position, and their insurance coverage. Additionally, Congress increased incentives for shared work programs as part of their pandemic relief packages.
Industries that especially benefit from this program are agriculture (fruit packing, nurseries, greenhouses), HVAC, and restaurants and breweries, who are often needing to adjust staffing levels due to the seasonality of their customers.
Programs like these have been widely credited with saving jobs and easing the costs associated with economic downturns. They are popular in other advanced countries, such as Germany, but so far remain underutilized in the U.S., despite the huge benefits. This is due to the weak job protection laws and the high use of layoffs as a solution to lowered revenues. Many states choose not to devote resources to create and maintain these programs.
Who is Eligible and How Do They Participate?
To be eligible, businesses must meet the SharedWork Employer Requirements listed on the WA State Employment Security Department (ESD) website. In short, they must meet the following:
- Participants must be considered permanent employees;
- The usual work hours for each participating employee are reduced by not less than 10 or more than 50 percent;
- All benefits must continue to be paid;
- They are a legally registered business in WA;
- They must have a minimum of two permanent employees enrolled.
In order to participate, there must be one single contact within the business to work with the SharedWork program specialists on all matters. Businesses must provide reports and information within 10 days of request or they face revocation of their plan or face penalties. All business changes must be report and contact with the specialists must be maintained throughout the business’s plan period.
To participate, employees must be hired permanently, be eligible for regular unemployment benefits, apply for benefits and submit weekly claims, and be able to work all hours and be available for all work hours offered by the employer. Employees can review the Unemployed Worker Handbook provided on the WA State ESD website to learn more about eligibility and participation.
To learn more about eligibility requirements, click here.
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Colleen Malmassari, SHRM-CP, PHR
HR Consulting Services Manager
Colleen Malmassari joined Larson Gross in 2021 and leads the firm’s HR Consulting Services practice, offering services ranging from policy development, staff training, labor law compliance, DEI initiatives, employee engagement assessments and recruiting.