Employers' Frequently Asked Questions - Work Sharing - Unemployment Insurance
1. What is Work Sharing?
It is a voluntary Maryland Division of Unemployment Insurance (DUI) program that provides an alternative to layoffs for employers confronted with a sharp, temporary decline in business. The Work Sharing (WS) program allows an employer to cut costs by dividing available hours of work among employees. While working reduced hours, the employees will also be eligible to receive partial Unemployment Insurance (UI) benefit payments based on their reduction in weekly work hours.
2. When did the WS program begin in Maryland?
In 1984, the Maryland General Assembly enacted legislation establishing WS program. In July 2014, several modifications and changes to the 1984 law were enacted. The Unemployment Insurance Law in Maryland that covers the WS program includes sections 8-1201 through 8-1209.
3. How are benefits calculated for the WS program?
If otherwise eligible, employees involved in an employer's approved WS plan will receive the percentage of their weekly UI benefit amount equal to the percentage of reduction of work hours for that week. You will continue to pay regular wages equal to the number of hours worked each week. For example, if an employer needs to reduce work hours by 30%, the employees will be eligible for 30% of their UI benefits.
4. What are the business advantages when my business develops a WS plan?
You can:
- Keep your skilled, trained workers
- Reduce future hiring and retraining costs
- Avoid disruption in your business operations
- Maintain worker productivity and morale
5. Will all of my employees be able to receive UI benefits?
In order to receive payment from UI, your employees must meet the eligibility requirements for regular Maryland UI benefits. Also, part-time employees must have been hired on a permanent part-time basis, not as temporary or seasonal workers. Workers may choose not to participate.
6. If my company participates in WS, must I use it for my entire business or company?
No. WS can be used in one or more departments or units. You have the flexibility to choose the area(s) involved.
7. Can there be different percentages of reduced hours for different employees in the same affected area?
No. All participating employees in an affected unit or department must be treated equally. However, the hours of employees in different affected departments or units may be reduced by different percentages. These differences must be specified and addressed separately in the plan.
8. How many employees are required for approval of a plan?
A minimum of two employees are required in order to "share the work."
9. Will my employees be required to look for work while they are working reduced hours?
No. Under the WS program, an employee is not required to be available or apply for other work or conduct an active search for work. Employees must be available to work all of the hours that you have available for them.
10. If I have union employees, must the union approve the plan?
Yes. If your employees have a collective bargaining agreement, the concurrence of the union's bargaining agent must accompany the application.
11. Are there any reasons why a business or employees could not participate in WS?
Yes:
- WS is not intended to be a means for employers to address problems such as seasonal or cyclical shutdowns, inventory control, model changeovers, or equipment maintenance.
- WS is not intended to allow an employer to use UI benefits to supplement the payroll on a continued basis.
- WS does not allow employees to participate if they have worked for you less than three months.
12. Who is responsible for monitoring employee participation and ensuring the plan is being administered properly?
The employer is responsible for ensuring that employees in the same affected group work the same number of reduced work hours. The hours worked must correspond to the reduction in the approved plan. If the DUI discovers inconsistencies with weekly reported hours, the plan will be reviewed and may be revoked.
13. Do I need to apply for the WS program?
Yes, and you must:
- Notify your employees and the bargaining agents that you are applying for a plan;
- Contact the Maryland DUI for an application;
- Complete and return the application and employee list within 7 days of your anticipated start date; and
- Be current with your UI tax contributions.
14. Can an employer apply for WS for individual departments, units or shifts within the business?
A WS plan need not affect the entire organization or location. WS may be used for a portion of an employer’s operation, such as a department, shift, or individual plant. It must, however, affect equally all employees of the designated employing unit.
15. When should I submit an application request?
You should submit your application 7-15 days prior to the start date of your plan. Applications will not be reviewed that have start dates more than 15 days in the future.
The effective date of the plan is a Sunday no earlier than 7 days after the plan is submitted. The expiration date can be no more than 6 months after the effective date of the plan.
16. In general, are most applications approved and what is the timeline for approval?
All completed WS applications submitted by employers to the Division of Unemployment Insurance are accepted for review. The approval procedures are set forth in section 8-1203 of the Unemployment Insurance Law of Maryland. Under normal circumstances, this process takes about 7 days to complete. Due to the current business climate, however, the approval process takes a little longer, but we are still doing our best to remain within the legal response time of 10 days after receipt of the completed WS plan application.
17. How will I find out if my business has been approved?
A decision is often made within 7 days of receipt of the completed WS application. You will be notified of the final decision, usually by e-mail. If approved, an UI representative will contact you with details.
18. For those companies approved, will employees start receiving partial UI at the point when their hours were reduced or when the employee’s application was accepted?
The WS plan application will specify the requested start date of the WS plan (which shall begin on a Sunday, no earlier than 7 days after the plan is submitted) and an expiration date (which is no more than 6 months after the effective date of the WS plan application). All requirements for approval of an employer's WS plan application can be found in sec. 8-1204 of the Unemployment Insurance Law of Maryland.
19. What happens if I am not approved?
If your plan is not approved, your decision will provide the reason. All decisions are final and may not be appealed. You may submit a new application for consideration 15 days after the first denial decision.
20. Are there regulations required for approval and implementation of my plan?
Yes, you will certify the following prior to your application being considered for approval:
- Without the plan, I would be laying off workers. The reduced hours for all employees included in this plan equals the hours that would be lost from the laid off workers.
- The employees' health insurance, medical insurance, retirement, or any other fringe benefit in effect prior to the WS application, will not be eliminated or diminished unless such benefits are eliminated or diminished for the entire workforce.
- Additional employees will not be hired for or transferred from the affected group for the duration of the plan.
- I have made the proposed plan or a summary available to each affected employee or, if applicable, to the collective bargaining representative for inspection. A description of how the plan was made available has been provided or, if notice of the plan was not feasible, an explanation of why advance notice was not given has been provided.
- I am aware of the potential effects on my UI account (experience rated or reimbursable) if WS benefits are paid.
- I agree to furnish reports relating to proper conduct of the plan and agree to allow the UI representative access to all records necessary to verify, monitor, and evaluate the plan prior to approval and after approval.
- I understand that the plan may be revoked if I am no longer in compliance.
- I agree that the terms and implementation of the plan are consistent with any obligation I have under federal and state laws.
- I have read and understand the WS application.
21. How are benefits paid to my employees?
Payments are issued through direct deposit or paper check.
WS benefits will not be released to an employee/WS claimant until the employer and the claimant certify the hours worked. The employer must submit the certifying information to the Reemployment and Trade Unit on a weekly basis. This simple form requires the claimant's name, Social Security number, hours worked and signature.
22. What happens if an employee has another job?
Hours or earnings from other employment are not used to calculate WS benefits, as long as the UI benefits are being paid under the WS plan (see below for exception).
23. During my plan, will my employees ever be eligible for regular UI benefits instead of WS benefits?
Yes, if during the week:
- There are not enough work hours available to meet the hours in the plan;
- There are more work hours available than approved in the plan; or
- No work is available.
When claimants are eligible for regular UI payments instead of WS payments, it may result in a total payment, a partial payment, or no payment for that week. During a week that regular UI benefits are potentially payable, earned wages from all employers will be used for the benefit calculation. If earnings exceed the claimant's weekly benefit amount, no benefits are payable for the week.
24. What happens if there is paid time off during a WS week?
Paid time off is considered worked time for the purpose of calculating WS benefits when:
- The employee did some work during that week; and
- The employee worked all available hours.
25. Can my plan be discontinued?
Yes.
- You may stop your plan at any time. However, there are procedures that must be followed if you restart your plan. You may return your employees to normal work hours and then return to WS status only one time during the plan.
- At the discretion of DUI, the plan may be stopped if you are not following the agreement or if you are found to be out of compliance. The decision to rescind a plan is final and cannot be appealed.
26. How will my employees receiving WS benefits affect my UI tax account?
WS benefits are charged against experience-rated employer accounts in the same manner that regular benefits are charged. For additional information please contact dluicdexperiencerating-dllr@maryland.gov or call 410-767-2413.
27. How do I see if my company qualifies and requests an application?
Please e-mail ui.worksharing@maryland.gov and a representative will contact you.
28. If you laid off employees, can you re-hire them and then do WS? If so, how long do you have to wait?
An employer can re-hire its employees and use the WS program, as the intent of the WS program is the stabilization of employment and an alternative to layoffs. For example, an employer may not be aware of the WS program and is experiencing the adverse impact of current economic conditions. Through outreach and promotional efforts, an employer becomes aware of the program only after employees have been laid off. Those employees can return to work under the arrangements of an approved WS plan application. Any UI benefits received will be adjusted to a pro rata share based on the percentage of reduced work hours. When the business recovers, the employer can immediately restore its workforce without incurring any additional costs for hiring, training, or retraining.
29. Are non-profit organizations eligible for WS?
Yes, a non-profit organization may be eligible for WS, provided the non-profit employer meets the criteria as either a covered or reimbursable employer in good standing with the State of Maryland.
30. What is the definition of a “unit” of employees?
An affected unit is a specified facility, department, shift, or other definable unit consisting of two or more employees to which an approved Work Sharing plan applies.
31. As work schedules may vary week by week, whose responsibility is it to report actual hours worked?
The employer is responsible to report the hours worked on the Weekly Claim Form that is submitted every week to the WS program. The employee's only obligation is to work all of the hours the employer schedules every week.
32. My employees' hours vary by customer demands (i.e. if it is a slow night, we send them home early; if it is a busy night, we ask them to stay later/work OT). Can employees with potentially fluctuating hours participate in a WS plan?
The employer will report the hours worked on the Weekly Claim Form that is submitted every week to the WS program. The employer should ensure that when schedules fluctuate, that the employees’ reduction in hours still falls within the 10-60% range to be eligible for WS.
33. What is the minimum and maximum number of employees a business must employ to be eligible?
There is no limit as to the size of the employer; however, the affected unit must have at least two employees in order to participate in a WS plan. This requirement, however, may be waived with good cause.
34. Is there a maximum number of weeks employers can use WS?
Employers can use WS for no more than 26 weeks in a year per unit, as this is the maximum number of weeks an employee will be eligible to receive unemployment benefits in a benefit year. When completing a WS application, employers must include an end date no more than 26 weeks in the future. However, employers can submit different WS plans that start at different times for different units.
35. Can an employer start off with one unit of employees and scale up to more units of employees as business needs change?
Yes, employers can add new units by either modifying an existing plan or submitting a new plan for approval.
36. Can my business apply for WS again in the future?
Employers can use Work Sharing for no more than 26 weeks in a year per employee unit, as this is the maximum number of weeks an employee will be eligible to receive unemployment benefits in a benefit year.
37. What is the difference between WS and just having my employees apply for partial unemployment?
There are situations where an employee will receive benefits if they are covered by a WS plan, but would not receive partial benefits without a WS plan. To be eligible for benefits, a claimant cannot earn more wages in a week than the weekly benefit amount that they are eligible for under the unemployment insurance program. That requirement does not apply to employees covered by a WS program. A WS claimant’s benefit amount is calculated by multiplying the amount they would be eligible for by the percentage of reduction in the employee’s weekly work hours.
WS applications must be submitted by the employer. Employees cannot submit an application for WS benefits. If a WS application is submitted, new employees cannot be added to the WS unit, and each employee’s hours must be reduced by an equal amount to all other employees in the affected unit. Employees have the option to not participate in the WS plan, and WS does not cover temporary, intermittent, or seasonal employees.
Utilizing a WS plan may make it easier for employees to receive benefits, and will help employers by encouraging employees to remain employed with their current employers. Employees must be able, available, and actively seeking full time work in order to be eligible for partial unemployment benefits. If there is a WS plan in place, employees will only have to be able and available to work the hours that are provided to them by their WS employer.
38. Do I have to inform my employees about applying to WS in advance?
Written approval of the collective bargaining agent is required for approval of a WS plan. If the affected employees are not covered by a collective bargaining agreement, then notice of the plan must be provided to employees who will be subject to the plan. If advance notice of the plan is not feasible, a detailed explanation as to why advance notice is not feasible must be provided.
39. Are exempt/salaried employees eligible?
Exempt and salaried employees are eligible, as long as their hours are equally reduced within the same unit of employees. It is important that an employer is clear in their communication to salaried employees that the WS plan is a reduction of hours, and NOT a reduction in salary.
40. Are employees from a temp agency eligible?
No, WS does not cover temporary, seasonal, or intermittent employment.
41. Are employees who live in a neighboring state and commute into Maryland eligible?
Yes. Any employee that is eligible for regular UI benefits can qualify for WS benefits if their employer’s WS plan is approved.