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Stacey Nakasian[/caption]
During the COVID-19 crisis, many Rhode Island employers are struggling to improve cash flow without layoffs. WorkShare, an R.I. Department of Labor and Training program, is one solution to that challenge.
Through the WorkShare program, an employer can reduce employees’ weekly hours and wages with employees receiving partial unemployment benefits for their lost hours. It’s a win-win. The program is designed to help businesses experiencing a temporary downturn support and retain employees until the downturn is over.
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Jared Sugerman[/caption]
A WorkShare plan, which the employer develops with help from – and submits to – DLT, can apply to all of the company’s employees, or just those in a specific plant, department, shift or other group, provided the affected unit is made up of at least two employees. For example, a restaurant owner could create a plan that calls for kitchen staff to work regular hours, while the hours of servers are reduced.
Under the program, the hours of those in the affected unit may be reduced by as little as 10% or as much as 50%. Wages of employees are reduced by the same percentage as their hours; so, if an employer’s WorkShare plan calls for receptionists to work 75% of their regular hours, receptionists will receive 75% of their regular weekly pay. Assuming they are otherwise eligible for unemployment benefits, employees in the affected unit will receive benefits calculated based on the reduction in hours. If an employee in an affected unit works more hours than provided in the WorkShare plan, her employer will not be in violation of state law or DLT rules. Rather, the employer will directly compensate the employee for the extra hours worked, and the unemployment insurance benefits will be adjusted.
Although Rhode Island workers generally can collect partial unemployment benefits based on a reduction in hours without WorkShare, the program offers two advantages.
First, depending on the magnitude of the reduction, workers facing a loss of hours might also lose valuable benefits, including health insurance, retirement benefits, paid vacation and sick leave. Employers participating in WorkShare are required either to continue to provide those benefits or to reduce benefits to all employees (whether or not in the affected unit) by the same amount.
The program is designed to help businesses … retain employees.
Second, under WorkShare, weekly reporting requirements typically the responsibility of employees claiming benefits are shifted to the employer. Employees are required to make one initial filing with the DLT; afterward, any reporting burden associated with the collection of unemployment benefits falls on the employer.
Although most Rhode Island businesses likely are eligible to participate, some restrictions apply. For instance, the business must have at least two employees. Also, WorkShare is not available to seasonal employers or to businesses delinquent on any tax payments.
Employees must be eligible to receive regular unemployment insurance benefits in Rhode Island to participate in WorkShare. If an employee in an affected unit is not eligible, that will not usually disqualify the employer from participating. If an employer finds that WorkShare is not a good fit, it can discontinue its participation. However, while an employer is participating in WorkShare (which it may do for up to three years), it cannot lay off any employees in an affected unit without DLT approval.
Rhode Island’s WorkShare program can help companies retain employees during the COVID-19 pandemic, while ensuring that employees receive unemployment compensation for reduced hours and other benefits.
Stacey Nakasian is a partner in the law firm of Duffy & Sweeney and head of the ligation department. Jared Sugerman is an attorney in the firm’s business law group.
