Question

Does the state offer programs that would help companies that are temporarily struggling economically but don’t want to lay off workers?

Answer

A program called WorkShare is designed for situations just like the one you describe.

The Massachusetts WorkShare Program, administered by the Department of Unemployment Assistance (DUA), provides eligible employers with an alternative to layoffs.  Once the DUA determines that a company is eligible, the WorkShare program allows employees of an entire company, a department, or even a small unit within the company, to share reduced work hours while also collecting unemployment insurance (UI) benefits to supplement their reduced wages. The employee’s reduction in hours may range from 10 to 60 percent (i.e. half a day up to three days per week). The decrease in the normal weekly hours must be shared equally by all workers in the participating unit(s).

A Massachusetts employer must have a positive UI Trust Fund balance at the time the WorkShare application is approved; or, if an employer has a negative balance, the employer must reimburse the trust fund on a dollar-for-dollar basis for all WorkShare payments paid out of the trust fund.

WorkShare details

An employer interested in WorkShare must file an application with the DUA. The application process requires the employer to:

• identify the company, department, or departments that will participate in the company’s WorkShare Plan.
• identify the employees to be included in the workshare program; the company must clearly define the participating employee group (e.g., Secretarial, IT, a shift, job function, or another definable department with at least two employees).
• identify the employees in the affected department(s) by name, SSN, the normal weekly hours of work, and the proposed reduction in working hours.
• certify that the reduction in work hours is in lieu of layoffs.
• state the proposed duration of your WorkShare Plan (it may range from 1 to 52 weeks)

WorkShare only applies to full-time and permanent part-time employees. Seasonal employees may not participate. If the employees are covered by a collective bargaining agreement, the union must agree to the WorkShare Plan.

While on WorkShare the employer must continue to:

• provide the same health insurance benefits to the employees who are participating in the WorkShare Plan;
• provide retirement benefits (under a benefit pension plan as defined in Section 3 (35) of the Employee Retirement Income Security Act of 1974) to any employees participating in the WorkShare Plan;
• be up to date with UI contributions, payments in lieu of contributions, and interest or penalty charges owed to the Department of Unemployment Assistance (DUA); and
• provide the DUA with any reports, records or other information that is necessary for the administration, verification and evaluation of WorkShare.

What does it mean for an employee to be on WorkShare?

Employees on Workshare receive a percentage of their regular salary. If they work 80% of their regular work week (i.e., a four-day work week or 20% reduction in hours), they receive 80% of their salary. They also receive 20% of their weekly UI benefit rate and so would receive a total of 90 percent of their weekly pay.

If applicable, the employee will also receive a percentage of the dependency allowance, provided the employee is the whole or main support for any child(ren).

Discontinuing a WorkShare Plan

An employer may discontinue an approved WorkShare Plan at any time. Alternatively, the DUA may revoke an active WorkShare Plan with good cause. Examples of good cause include:

• Failure to comply with the assurances given in the Plan.
• Unreasonable revision of the productivity standards for the affected department.
• Conduct or occurrences that are intended to defeat the purpose and effective operation of the Plan.
• Violation of the criteria on which the plan was approved.

Interested employers should visit the workshare website to get a Workshare application and a video on how to apply. If you have questions about the WorkShare Program’s application process, or if you need assistance with applying for the Program, please contact the DUA’s WorkShare Department at 617-626-5521.

Any employer considering implementing a WorkShare program will have to plan how to present the information to its workforce and to assure the employees that this is the best way to get the company through a difficult period without reducing headcount.

AIM members with questions about this or other human-resource matters may contact the AIM Employer Hotline at 800-470-6277.