"WORK SHARING UNEMPLOYMENT INSURANCE PROGRAM"
WORK SHARING UNEMPLOYMENT INSURANCE PROGRAM This California program allows for the payment of Work How Does an Employer Participate in Work Sharing Unemployment Insurance benefits to individuals Sharing? whose wages and hours have been reduced. The program is considered a temporary and practical alternative to To participate in this program, employers may call or layoffs. For example: write: • Due to an economic downturn, an employer with 100 EDD Special Claims Office employees finds it necessary to lay off 20 employees. P.O. Box 419076 However, rather than lay off these employees, the Rancho Cordova, CA 95741-9076 employer participates in the Work Sharing program. (916) 464-3300 The employer keeps all 100 employees on the payroll but reduces their workweek from five days to four The Special Claims Office will mail interested employers days, thereby achieving the same desired 20 percent a Work Sharing Plan Application and other general reduction in payroll. All 100 employees continue to information. Employers must send the completed Work earn wages for four days and also are eligible for Work Sharing Plan Application to the Special Claims office for Sharing benefits for the fifth (nonworking) day. The approval. If a collective bargaining agreement(s) covers employer retains all trained staff and, when business the affected employees, the concurrence of EACH union improves, the employees resume their five-day work bargaining agent(s) is required. A Work Sharing plan is schedule. approved for a six-month period. Background What Happens After the Employer's Work California's Work Sharing program was the first program Sharing Plan Application is Approved? of its kind in the nation. It was established by the California State Legislature in 1978 under Senate Bill The Special Claims Office in Sacramento sends the 1471. The objective of the Work Sharing program is to employer a letter of approval, one mail claim packet for help employers and employees avoid some of the each participating employee, and a ten-week supply of burdens that accompany a layoff situation. If employees weekly certification forms for each employee. During the are retained during a temporary slowdown, employers weeks of reduced hours and wages, the employer issues can quickly gear up when business conditions improve. the certification forms to the participating employees. Employers are spared the expense of recruiting, hiring, and training new employees. Employees are spared the All Work Sharing claims are filed by mail. The employer hardship of total unemployment. and participating employee complete the documents contained in the mail claim packet. After completion, the Who May Participate in Work Sharing? documents are mailed to the Special Claims Office to establish an Unemployment Insurance claim. Employees Any employer who has a reduction in production, services, approved to participate in the program must meet regular or other conditions that cause the employer to seek an Unemployment Insurance claim filing requirements. After alternative to layoffs may participate in the Work Sharing the Unemployment Insurance claim is filed, the employer program. Some of the specific requirements are: issues a weekly certification form to each participating employee. Benefits are paid weekly proportionate to the • A minimum of two employees, comprising at least percentage of reduction in hours and wages. For ex- 10 percent of the employer's regular work force or a ample: unit of the work force, must be affected by a reduction in wages and hours worked. • An employee normally works a five-day workweek and is paid $200. If this employee's workweek is reduced to four days, the employee's weekly wages would be • The reduction in wages and hours worked also must $160. This is a 20 percent reduction in wages and be at least 10 percent. hours. The Work Sharing benefits for this employee are DE 8714BB Rev. 16 (10-05) (INTERNET) Page 1 of 2 CU P.O. Box 826880 • Sacramento CA 94280-0001 20 percent of the Unemployment Insurance benefits • If employees are retained during a temporary the employee would receive if the employee were slowdown, employers can quickly gear-up when totally unemployed. If the employee's weekly business conditions improve. Unemployment Insurance benefit amount is $91, the employee would qualify for $18 in Work Sharing • For employers who need to reduce their work force benefits. This results in a reduction in gross wages of permanently, Work Sharing can be used as a phased only $22 for that week ($160 + $18 = $178). transition to layoff. How is the Employer Charged? • Affected employees can continue to work at reduced levels with an opportunity to find other employment Employers are charged for Work Sharing Unemployment before an expected layoff. Insurance benefits in the same manner as for regular Unemployment Insurance benefits. Questions regarding • More equitable than layoffs, which place the burden employer charges may be directed to: of economic adjustments for an entire business on relatively few employees. EDD Contribution Rate Group (916) 653-7795 • Can be used in almost all types of business or industry. The Advantages of Work Sharing For More Information The Work Sharing program can meet employers' needs due to its built-in flexibility and possible variations: For further information, please contact: • Minimizes or eliminates the need for layoffs and the EDD Special Claims Office accompanying hardships for employees. P.O. Box 419076 Rancho Cordova, CA 95741-9076 • Enables a business to retain trained employees and (916) 464-3300 avoid the expense of recruiting, hiring, and training new employees. For additional information on other EDD programs and services, please visit EDD's Internet site at www.edd.ca.gov. DE 8714BB Rev. 16 (10-05) (INTERNET) Page 2 of 2