Workshare: An Alternative To Layoffs

August 2020 IssueToolbox ArticlesUncategorized

COVID-19 presented a most graphic example of when Massachusetts’ WorkShare could be implemented as a management tool.

There are times when business is really slow or you are just waiting for a big order and you have a lull in workload where WorkShare is a solution.  As a business owner, you now have an option.  Employers can divide available work between affected employees instead of furloughing or laying them off.  This unique program allows employees to receive a portion of their unemployment compensation while working reduced hours.  

For a business owner /manager it increases cash flow by reducing payroll expenses, keeps their skilled and trained team in place, reduces hiring and training costs, and avoids additional disruptions in the business operations.  Most of all it maintains worker commitment, loyalty and productivity.

Any company, non-profit or governmental agency in Masschusetts is eligible.  Businesses in every sector, including manufacturing, construction, retail, and high-tech can benefit from the WorkShare program.  Although it is open to all Massachusetts businesses, it is best for those who are or anticipate short term reduction in staffing.  The plan period is different for every participant, but has to be within the 26-week window of the plan period defined by the organization.  

When an organization uses the WorkShare plan, the hours of all workers in the affected unit must be reduced the same amount and the employees must apply for regular unemployment benefits from the state’s Unemployment Assistance (DUA) program.  The workers’ hours can be reduced from 10 to 60 per cent and it must be the same for all members of the work unit.  An organization can have more than one plan in place for different work units, but employees cannot be in more than one unit.  Even though the hours are reduced, the benefits offered, including health insurance and defined retirement benefits must be maintained.

An interesting element of the COVID-19 pandemic is the interplay between the state’s Unemployment Assistance Program, the WorkShare program and the Enhanced Unemployment Benefits in the CARES Act ($600 per week benefit). Massachusetts Unemployment Insurance benefit requirements have been modified:  

  • All requirements to attend seminars at MassHire career center have been suspended
  • “Worksearch” requirements will be interpreted to appropriately permit claimants affected by COVID-19 to collect benefits.  Online work searches should continue.
  • Deadlines missed by employers and claimants due to the effects of COVID-19 will be excused.
  • All appeal hearings will be held by telephone only.
  • Workers who are temporarily unemployed due to lack of work due to COVID-19 will be eligible for unemployment benefits.  They will be considered “unemployed” due to lack of work regardless of whether they are quarantined, laid off, furloughed or if their workplace is fully or partially shut temporarily.
  • The employee is considered on “standby” if temporarily furloughed or laid off therefore is not looking for work, however the employee must remain in reasonable contact with the employer.  The employer must verify the employee’s standby status and provide an expected return-to-work date. 

If the employees are part of a union, then the union must agree to the WorkShare plan.  It is best to start discussions with the union early in the process.  

To apply for WorkShare log on to your UI Online Employer Account at www.mass.gov/dua.  Click on Account Maintenance at the Employer Home page.  Then request Workshare Benefits, hit Search and Add WorkShare Plan.  Employers must certify they are using WorkShare to avoid layoffs.  Cancelling your WorkShare plan is easy.  Just notify DUA WorkShare Department at 617-626-5521.

SCORE Cape Cod & the Islands Chapter is a source of information regarding the CARES Act (Payroll Protection Plan – PPP and Economic Injury Disaster Loans/Grants – EIDL) along with other programs offered by the SBA and the Commonwealth.  A businesses first stop might be the SCORE website COVID-19 Resource, Tools & Templates– www.capecod.score.org . The second step is to schedule an appointment with one of SCORE Certified Mentors who has been trained to address the COVID-19 issues.  Businesses can schedule themselves by visiting the SCORE website and click Connect with a Mentor.

 

Marc L. Goldberg is a  Certified Mentor and Assistant District Director for Outreach and Workshop Chair for Cape Cod SCORE 225. He can be reached at marc.goldberg@scorevolunteer.org or 508-398-5547.             

Menu

Join over 4,700 professionals who receive our local business news,
tips, and educational content to enhance their career or business!!

Your email is confidential and will never be sold or traded