Coronavirus FAQS For Employers: Workshare

Employers may be able to avoid layoffs caused by the COVID-19 outbreak by choosing the WorkShare alternative offered by the Rhode Island Department of Labor and Training (“DLT”).  Historically, employers who hoped to reemploy their workers following a temporary economic downturn ran the risk of losing those skilled workers to other business opportunities.  In addition to sparing employers the potential loss of its existing workforce, WorkShare also spares a company’s employees the financial and emotional hardship associated with a layoff.

 What is WorkShare?

WorkShare is a program administered by the Rhode Island Department of Labor and Training (DLT).  An alternative to layoffs and reductions-in-force, WorkShare allows employers to reduce the number of hours worked by some or all of their employees.  In turn, employees whose hours and wages have been reduced are able to collect a portion of their regular unemployment insurance benefits as compensation for lost pay.

 How does WorkShare differ from unemployment insurance benefits paid to employees for periods of total unemployment?

Generally, workers are eligible to collect total unemployment insurance benefits when they have been separated from their employer as a result of a layoff or reduction-in-force.  Their weekly benefit amount is set at fifty-seven and a half (57.5%) of their average weekly wage and capped at $586 per week.

Employees of employers participating in WorkShare receive between fifty percent (50%) and ninety percent (90%) of their regular pay in addition to a reduced weekly unemployment benefit corresponding to the number of hours worked.  Under WorkShare, employees make more money than if they were fully laid off.

Can employees receive partial unemployment benefits even if their employer is not participating in the WorkShare program?

 Yes.  If an employee works less than full-time hours and their gross wages (before taxes) are less than their weekly unemployment benefit rate (excluding any dependency allowances), they may be entitled to collect partial unemployment benefits.

 How long can employees receive partial unemployment insurance benefits through the WorkShare program?

Employees can receive a maximum of fifty-two (52) weeks of partial unemployment insurance benefits through the WorkShare program in a single benefit year.

How does the WorkShare program benefit both employers and employees?

WorkShare allows employers to reduce their payroll expenses while retaining skilled workers and minimizing operational disruptions caused by layoffs and reductions-in-force.  Since trained workers are retained on the employer’s payroll, participating employers are able to respond quickly when economic conditions improve.  Employers do not need to recruit and train new workers.

WorkShare allows employees to maintain an ongoing employment relationship with their employer.  They are also able to continue receiving the same group health insurance benefits and/or retirement benefits to which they would have been entitled had their hours and pay not been reduced.

Are there limits regarding the number of hours by which an employee’s workweek may be reduced as part of a WorkShare plan?  If so, what are the limits?

An employer participating in WorkShare must reduce the work hours of all employees in the affected business unit or units by at least ten percent (10%) and by no more than fifty percent (50%).

What are some of the other criteria that a WorkShare plan must meet in order to be approved by the Rhode Island DLT?

In order to be approved by the Rhode Island DLT, an employer’s WorkShare plan must:

  • Identify with specificity the affected business unit or units that will be subject to the WorkShare plan. An unit can be a specified plant, a department, a shift, or other definable unit consisting of at least two employees.
  • Specify the proposed starting date of the WorkShare plan.
  • Identify by name, Social Security Number, usual weekly hours of work, and proposed wage and hour reduction all employees who will participate in the WorkShare plan.
  • Certify that the reduction in the usual weekly hours of work is in lieu of layoffs that may affect at least ten (10) percent of the employees in the affected business unit or units to which the WorkShare plan will apply.
  • Reduce the usual weekly hours of work for employees in the affected unit or units by not less than ten percent (10%) and not more than fifty percent (50%).
  • Certify that group health insurance benefits and/or retirement benefits under a defined benefit plan (as defined in section 414(j) of the Internal Revenue Code) or contributions under a defined contribution plan (as defined in section 414(i) of the Internal Revenue Code) will continue on the same terms and conditions for any employee whose workweek will be reduced under the WorkShare plan.
  • Describe the manner in which the requirements of the WorkShare program will be implemented (e.g. plan for giving notice to affected employees, estimated of number of layoffs that would have occurred absent participation in the program, etc.).

 Are employers allowed to have only some departments participate in the WorkShare program?

Yes.  An employer may have all of its employees participate or may have only certain shifts or business units participate.

Can an employer whose employees are represented by a union participate in WorkShare?

Yes, provided that the union reviews and approves the proposed WorkShare plan.

Do employees need to be eligible to collect Rhode Island unemployment insurance benefits in order to participate in a WorkShare plan?

Yes.  Only employees who would otherwise be eligible to collect Rhode Island unemployment insurance benefits may participate in a WorkShare plan.

Are seasonal employers eligible for WorkShare?

Generally, no.  Temporary or intermittent employees are ordinarily not eligible to participate in a WorkShare program.

How can employers apply for the WorkShare program?

Additional information about the WorkShare program and application materials can be accessed on the Rhode Island DLT website: http://www.dlt.ri.gov/ui/ws.htm.  Completed application packets can be faxed to (401) 462-8506.

Contact Stacey Nakasian at Duffy & Sweeney to learn more here.  

Or visit Duffy & Sweeney’s COVID-19 Resource Center here.