Shared sacrifice helps keep workers on job
A few years ago, during a prolonged slowdown at New Annex Plating Inc.’s electroplating business in South Kingstown, owners Barry Fishback and Robert Silverman were forced to consider letting go several employees with more than 20 years’ experience with the firm.
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But thanks to a R.I. Department of Labor and Training program that helps employers imagine alternatives to layoffs when business lags, Fishback and Silverman were able to retain their entire work force.
The WorkSharing program – available to any private employer with two or more employees – allows a business to temporarily reduce its employees’ working hours, and it provides those workers with partial unemployment insurance benefits.
The program can enable workers to keep drawing a paycheck and qualifying for health insurance and retirement benefits, while allowing their employers to retain skilled staff and save the time and expense of training new employees.
The 15-year-old program has averted almost 12,000 layoffs in Rhode Island since 2000, the first year for which such data was available, according to the DLT.
“It’s a win-win for both employers and employees, and for the entire state,” said Ray Filippone, the department’s assistant director of unemployment insurance and temporary disability insurance.
Originally designed to protect manufacturers against volatile production cycles, the program was later expanded to include other sectors, including wholesale, durable goods and social services.
Filippone said WorkSharing even enabled many companies, across a variety of sectors, to retain their full work forces during the recession that followed the Sept. 11 terrorist attacks.
Thirty-eight Rhode Island companies, of which about 90 percent are manufacturers, are currently enrolled in the WorkSharing program, he said.
Under the program, an employer can reduce the hours of all workers in a department or unit – in equal measure – by between 10 percent and 50 percent. Employees who normally work at least 30 hours per week are then eligible for WorkSharing, after a one-week waiting period.
Workers enrolled in the program receive a percentage of their full weekly unemployment benefit amount – including any dependents’ allowances – that is proportional to that week’s reduction in hours on the job. “If you are reducing your hours by 20 percent, you get 20 percent of your full unemployment insurance,” said Laura Hart, a spokeswoman for the DLT.
If a participating worker earns money in the same week with another employer, those earnings will not affect the individual’s WorkSharing benefits, the DLT said.
At unionized companies, the union representing affected workers must sign off on any WorkSharing agreement – and generally agrees to do so, Filippone said.
The program, financially self-perpetuating, is funded by participating employers based on their “experience rating” within the state’s unemployment insurance system. The ratings are given to each company by the state, based on the percentage of workers who receive unemployment benefits; the ratings then determine each company’s unemployment tax rate.
“Employers like this program because their experience rating doesn’t go up, because they’re not laying people off,” said Rose Lemoine, who oversees the WorkSharing program for the DLT.
The program is not extended to companies – including landscapers and the tourism industry – that experience seasonal slowdowns each year. Rather, Filippone said, it is meant for businesses that are contending with temporary, unexpected hardship.
Such was the case at New Annex Plating a few years back, when the company was increasingly losing business to new competitors overseas.
Fishback and Silverman enrolled all 28 of their employees in WorkSharing while they sought to save the jewelry-plating business by diversifying into new markets. New Annex Plating recently came off the program, after a strong fourth quarter, Fishback said.
“Our people are working 40 hours and overtime, going back to it,” he said. “This program allowed us to cut our payroll so we could be competitive and survive through the rough times. I can’t express to you how wonderful it’s been not to have to lay them off.”
