Describes work sharing and the opportunity for federal action to expand its use.
“Work sharing, also called short-time compensation, was a special Unemployment Insurance (UI) program that softened the impact of a business downturn on workers, employers and the government. Under work sharing, an employer reduced the hours of work for all workers in a firm or a business unit instead of laying off a portion of the workforce. Workers then received partial UI benefits to help compensate for the lost hours of work. Because of the severity of the current recession, work sharing programs should be expanded and more states should adopt them. This policy brief described work sharing and the opportunity for federal action to expand its use” (p.1). (Abstractor: Author)

Major Findings & Recommendations

"Work sharing is a promising alternative to layoffs, which reduces the impact of an economic decline on workers, employers and the government. The most significant benefits are that it: • Helps workers keep their jobs, maintain their benefits and continue to build their skills and experience while the overall labor market is weak. • Offers distinct advantages for entry-level and less experienced workers who are especially vulnerable if a layoff occurs. • Enables employers to keep the workforce intact and retain skilled employees, greatly reducing the costs of recruitment and training when the economy recovers. • Benefits the government by keeping more people employed and productive. There are additional reasons to encourage work sharing. A modest reduction in earnings spread across a large pool of workers is less likely to result in the significant hardships that jobless workers and their families may experience. Also, as employers become familiar with and participate in the program over time, they may adopt more thoughtful and responsible approaches to layoffs. Work sharing is not a magic bullet for a deteriorating labor market. It is most useful for companies and industries in which it is possible to reduce hours and modify work schedules. It is a tool to respond to falling demand, but it is not designed to avert a permanent layoff or plant closing. In addition, there is potential for abuse if a work sharing effort is not carried out with input from workers or their representatives” (p.3). (Abstractor: Author)