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Work Sharing - A Layoff Aversion and Reopening Unemployment Insurance Program

Work Sharing


Maryland Department of Labor Work Sharing - English
Transcript


Maryland Department of Labor Work Sharing - Español

OVERVIEW

In 1984, the Maryland General Assembly enacted legislation establishing the Work Sharing Unemployment Insurance Program. Work Sharing is a voluntary program that provides an alternative to layoffs for employers faced with a temporary, non-cyclical decline in business due to lower economic activity. The program is designed to avoid layoffs by preserving jobs for current employees and to assist businesses that have already undertaken layoffs to reopen and resume operations gradually. Employers who participate in Work Sharing can retain employees by temporarily reducing the hours of work, within a range of 10% to 60%, among employees within the affected unit(s). The employees with reduced work hours receive partial unemployment insurance benefits to supplement lost wages.

Work Sharing can mitigate or prevent the adverse effects of an economic downturn by keeping businesses connected to their employees, and ensuring employees continue to receive compensation. Work Sharing can also serve as a means of bringing most or all of a temporarily laid off workforce back to the job, a decline in business or other factors prevent operating at full staffing levels immediately.

EMPLOYER BENEFITS

  • Maintain productivity and quality service
  • Retain experienced employees
  • Keep employee morale high
  • Flexibility to utilize Work Sharing for the entire business or just select unit(s)
  • Maintain full staff for future business growth when economic conditions return
  • Save the expense and time of recruiting, hiring, and training new employees
  • Gradually reopen business operations by rehiring former employees at reduced hours

EMPLOYEE BENEFITS

  • Keep current job
  • Continue to earn wages from the employer for hours worked
  • Receive prorated unemployment insurance benefits to supplement lost wages
  • Health and retirement benefits will not be reduced or eliminated, unless they are reduced or eliminated for the entire workforce
  • Not required to meet the same terms as those on regular unemployment insurance, such as actively searching for work or accepting offers of suitable work other than from the Work Sharing employer

REQUIREMENTS

  • Employers must have a minimum of two employees of an affected unit in the Work Sharing plan*
  • Employers must reduce a Work Sharing employee’s hours by 10%-60%
  • Employers must reduce the percentage of hours of work equally among a unit of employees; however, the percentage of reduction may vary from unit to unit*
  • Employers can use Work Sharing for no more than 26 weeks in a year per unit
  • Work Sharing is not for employers to use for seasonal or cyclical shutdowns
  • Employers must be current with their unemployment insurance tax contributions
  • Employees must have been working for the employer for at least three months
  • Employees who are full-time, part-time, exempt/salaried, or hourly are all eligible as long as they normally work 20 to 40 hours in a week. Seasonal and temporary workers are not eligible.

* Requirement can be waived with good cause

SAMPLE SCENARIO

An employer has 20 full-time employees in a unit, each of whom works 40 hours per week. Due to an unexpected reduction in business, the employer must reduce payroll by 25%. Instead of laying off 25% of the employees, the employer may apply for Work Sharing and reduce each employee's hours by 25%, or 10 hours per week, so each employee works 30 hours per week. If the Work Sharing plan is approved, affected employees would receive 25% of the full amount of unemployment insurance benefits they would be entitled to had they been fully laid off, while also being paid for hours worked at the Work Sharing employer. So, if the employee had been completely laid off and was deemed eligible for a weekly unemployment insurance benefit amount of $400, the Work Sharing employee with a 25% reduction in work hours would receive $100 (25% of $400) of unemployment benefits in addition to the 30 hours of wages earned from the employer. When business improves, the employer has retained its trained workforce and may resume normal operations.

ADDITIONAL INFORMATION

Please review the following FAQ pages for additional information:

Contact ui.WorkSharing@maryland.gov for additional information or questions.

NEXT STEPS

  1. Notify your employees and the bargaining agents (if applicable) that you are applying for a Work Sharing plan.
  2. Download and complete the application and participant list (Excel).
  3. Return the application and participant list to ui.WorkSharing@maryland.gov within 7-15 calendar days before your anticipated Work Sharing start date.
  4. A decision will be made within 15 calendar days of receipt of the completed application. You will be notified of the final decision by e-mail. If approved, an unemployment insurance representative will contact you with next steps.
  5. If approved, the employer is required to submit a Weekly Certification Claim form of hours worked to ui.WorkSharing@maryland.gov on a weekly basis. This will include the employee names, information, hours worked, and verification. Employees will not need to submit a weekly claim to unemployment insurance.