The WorkShare program is an alternative for employers faced with a cut in workforce. Employers can divide available work between affected employees instead of laying off workers. It allows employees to receive a part of their unemployment insurance (UI) benefits while working reduced hours.
How WorkShare can help your business
The WorkShare program helps employers to avoid the burdens of a layoff situation. It also helps employees avoid full unemployment. WorkShare also allows employers to:
- Increase cash flow
- Keep skilled, trained workers
- Reduce future hiring and retraining costs
- Avoid disruption in business operations
- Be prepared for future business growth
- Maintain worker productivity
Unemployment tax rate
WorkShare benefits are unemployment insurance benefits. Your WorkShare plan charges your employer account with any benefits paid. Since you use WorkShare instead of a full layoff, compare the benefits paid for full layoffs to those paid under WorkShare. One individual receiving 100% benefits equals roughly five individuals receiving 20% WorkShare benefits.
Things to note:
- WorkShare charges unemployment insurance benefits the same way as regular unemployment benefits
- If your organization reimburses the Department of Unemployment Assistance (DUA) for unemployment insurance benefits in lieu of contributions you will be charged dollar-for-dollar for WorkShare benefits paid to your employees
- Nonprofit and government entities who have chosen to be reimbursable can still take part in WorkShare, but will be charged dollar-for-dollar
- If your organization pays WorkShare benefits as a result of submitting misleading information, you must repay those benefits
Like regular unemployment insurance benefits, WorkShare benefits are deducted from your reserve balance on your annual experience rate notice. The amount of your WorkShare benefits determines your experience rating. DUA specialists can help you understand how these benefits impact your contribution rate.
- Maintain the same fringe benefits (health insurance and defined retirement benefits) for participating employees
- Submit quarterly contribution and wage detail reports
- Pay unemployment taxes in a timely manner
- Report any employee’s part-time income from a non-Workshare employer during the WorkShare plan period
- Report any changes to the WorkShare plan to the Department of Unemployment Assistance
- WorkShare is voluntary and a worker can decline participation
- Workshare can include salaried workers, as long as the employer reduces both hours and pay
- Owner/officers of the corporation must be eligible to receive UI benefits in order to participate in WorkShare
- By law, at least 2 employees must be listed on a WorkShare plan
- The reduction percentage you show on the plan must be the same for each employee and between 10% and 60%
- Your WorkShare plan can include a scheduled shutdown for up to 2 weeks
- Once you approve a WorkShare plan, workers have to work the reduced hours stated on the plan each week
The reduction percentage you outlined on your WorkShare agreement indicates your workers' weekly benefits.
Report any discrepancy in hours to the DUA WorkShare unit such as a worker working:
- Fewer hours in a week than the hours listed on your plan
- More hours in a week than the hours listed on your plan
Other paid leave
If the workers did not work the set number of hours for a certain week, they can supplement by using other paid leave for a part of the week to make up for it.
Upon full layoff, the worker becomes eligible for their full weekly unemployment insurance benefit amount. The maximum benefit credit of unemployment insurance benefits will be reduced by the amount of WorkShare benefits they have received. Employers must report any layoff by noon on the Friday before the layoff. This way, affected workers get their full weekly benefit amount instead of the reduced benefit amount.
WorkShare and second jobs
The employer has to report weekly income earned by the worker from their second job for each week that the WorkShare plan is in effect. Any wages that are in excess of $246 will be deducted dollar-for-dollar from the weekly WorkShare benefit payment.
WorkShare plan flexibility
The WorkShare plan is valid for 52 weeks. You can modify or cancel your plan any time.
- Employers can have more than one plan at a time. Workers can only be on one plan.
- All employees listed on your WorkShare plan must be permanent full-time or part-time workers. Seasonal and temporary workers are not eligible. Under WorkShare, the employer reduces workers' hours and their pay.