In a difficult economy, when employers don’t want to reduce their workforce,
they may opt to reduce their employees’ workweeks.
The Rhode Island Department of Labor and Training (DLT) encourages this practice in its Worksharing program. Designed to provide employers with an alternative to the often-agonizing prospect of laying off workers when business declines, the program allows a business to reduce the hours and wages while at the same time allowing those participating to receive partial unemployment insurance benefits to supplement lost wages. The program lasts a maximum of 26 weeks.
Bill Brock, coordinator of unemployment insurance programs for the DLT, said participation in the program, which was established in 1991, has increased over 50 percent in the past few months.
"Three months ago we were operating with approximately 50 companies," he said. "Now it’s closer to 85 or 100."
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The Worksharing program usually involves companies that plan to cut their staff by about 20 percent. The DLT steps in and advises the companies to reduce hours by 20 percent instead.
"We will then kick in 20 percent of their unemployment benefits," said Brock. "It really helps the employers hang onto skilled workers. Because they put in the time, effort and money to train those workers, and then to have them turn around and lay them off hurts both the company and the worker."
Brock said not only does this alternative generally improve employee morale, but it also reduces hiring and retaining costs when businesses improves
According to John Cronin, executive director of Rhode Island Manufacturing Extension Service, many companies with whom his organization works, are participating in the program.
"It seems to be happening pretty routinely right now," he said. "Just among the companies we’re serving quite a few have chosen Worksharing to smooth out production flow and keep a lot of the talented workers on board."
Cronin said most businesses involved in Worksharing are giving the employees Fridays off and shutting down the plants as management teams work on generating more orders.
"So far it seems to be a win-win situation for both the companies and the employees," he said. "Everybody knows we’re in a tough recession right now, and in manufacturing especially."
As far as other industries to participate in the Worksharing program, Rick Brooks, director of United Nurses and Allied Professionals, said not many medical workers have participated, because the majority of nurses are part-time workers anyway.
"Right now health care is sort of bucking the trends," he said. "There are still labor shortages, and we’re not really experiencing the layoffs and downsizes that other industries are experiencing or at least anticipating."
Brock said that within all participating industries there haven’t been any negative reactions to Worksharing.
"From the unions’ points of view, we’re helping to save jobs," he said. "Benefits are paid by the employer. It’s not like a grant program."
Joe Simonelli, director of human resources for Technical Materials in Lincoln started Worksharing last April. Although the company saved some jobs, about 86 were laid off from a workforce of about 300.
Simonelli said had the company not participated in the program, a lot more jobs would have been lost. And for the employees who were not laid off, and participated in the program, Technical Material reduced 20 percent of their hours, but with unemployment benefits they were able to make 93 percent of what they would normally make.
Joe Sharman, executive vice president and owner of Pawtucket-based Precision Metals has had such a good experience with Worksharing that he recommends it to customers.
"I had been looking at the program for three months, and I finally introduced it in November," he said. "And when I told my employees about it they understood and even asked why I didn’t implement it earlier."
Precision Metals has half of the workers on the program take Monday off, and the other half take Friday off.
Cronin said that although almost all workers would enjoy more money, there are a few obvious perks for the employees.
"It seems to me that given the choice of either half of the workers getting laid off, or everybody being laid off for one day, the second one is a better deal," he said. "And as far as having a three-day weekend, that sounds good to me."
