California Employer Advisory Council

Ask An EDD Expert

February 13, 2009

What is Work Sharing?

Work Sharing is a program available to employers who reduce employee wages and hours as an alternative to layoffs. The Work Sharing Unemployment Insurance program allows for the payment of benefits to individuals whose wages and hours have been reduced. This program is considered a temporary and practical alternative to layoffs.

This program was established by the California legislature to help employers and employees avoid some of the burdens that accompany a layoff situation. If employees are retained during a temporary slowdown, employers can quickly gear up when business conditions improve. Employers are spared the expense of recruiting, hiring, and training new employees. Employees are spared the hardship of total unemployment.

Any employer who has a reduction of production, services, or other conditions that cause the employer to seek an alternative to layoffs may participate in the Work Sharing Program.

Testimonial

No matter how good a program sounds, the real test is whether and how it works in the real world. The Work Sharing Program available through the UI Division of EDD sounds like a great program, and it is. The program allows an employer who has reduced the percent time of at least 10 percent of staff (and this can be by department or division, rather than for the whole company) by at least 10 percent to allow the employees working reduced hours to file for and collect partial unemployment. This is a win-win-win situation: it allows the employer to reduce his/her workforce during a downturn without losing valued staff, and thus keeping the ability to bring everybody back up to full time when the workload increases (without going through a hiring process); it allows the employee to retain his/her job and benefits (and even part of a job is better than no job in tough times); and it reduces UI expenditures for the state, since it allows employers to keep staff at part time rather than letting them go, so the state is paying partial rather than full unemployment, and other resources (such as job search, training, case management) are not needed.

My firm, a small policy research company, has used Work Sharing several times in the past 10 years. It is highly flexible: the application/approval process for the program is simple; the approval is for six months at a time (and renewal is very easy); and you can transition staff on and off the program and change their hours/percent time worked from week to week (very important in a small business!).

There is a small weekly paperwork burden, but compared to the cost of losing valued employees, it is very small. I include information about Work Sharing in our interview process, so that potential staff know that our industry does experience occasional downturns, and that we have a great and proven way of managing them. I encourage anyone facing the possibility of staff reductions to contact EDD about this wonderful and underutilized program.

Frances Laskey
Director of Human Resources
Berkeley Policy Associates

The following information is available on the EDD Web site:

Work Sharing Fact Sheet
A Guide for Work Sharing Employers
Work Sharing Application

For more information you can call the Employment Development Department at:
Employers - (916) 464-3343
Claimants - (916) 464-3300