Shared Work and Unemployment Information for Small Businesses

Shared work programs are unemployment programs that allow businesses to reduce employee wages and hours as an alternative to layoffs. Under a shared work program, employees can receive partial unemployment benefits to offset a portion of their reduced wages.

Employers benefit by retaining skilled employees, eliminating the need to hire and train new employees, and possibly saving recruiting fees when the period of disruption ends.  Employees benefit by receiving partial compensation for lost wages while continuing employment and maintaining health insurance and other benefits.

General Requirements of the Shared Work Program:

  1. Employers must file a Shared Work Plan (the “Plan”) with the Department of Labor identifying the employees included in the Plan.
  2. Employers are required to estimate the number of layoffs that would occur in the absence of the Plan and to certify that the reduced hours for employees included in the Plan are equal to the hours that would be lost due to layoffs.  Reductions in hours and wages must be between 20% and 60% and the Plan cannot exceed 53 weeks.  Once approved, a Plan can be modified due to changing business conditions but must not exceed 53 weeks. Employees may receive unemployment benefits for up to 26 weeks during the 53 week period.  These 26 weeks do not have to be consecutive.
  3. A shared work plan covers all employees, or a particular group of employees, which can be a business unit, a shift or a department.
  4. The reduction in hours must be equal for all employees in the specific group.  An employer can develop different plans for different groups within the business.  Employee benefits must be maintained during the effective period of the Plan, unless those benefits are eliminated or reduced for the entire workforce.  No new employees can be hired for any specific group covered by the Plan, unless they are replacing employees covered by the Plan who voluntarily resigned.

Here are the links to NYS Department of Labor:

https://labor.ny.gov/ui/dande/sharedwork1.shtm

https://labor.ny.gov/ui/claimantinfo/sharedworkclmtfaq.shtm

https://labor.ny.gov/ui/employerinfo/shared-work-program.shtm

Some tips:

  • The application should be completed on-line. If submitted in hard copy the system will take 2-3 weeks to process (submit online and complete your weekly submittal  (employee & employer) on line to expedite the process.
  • The pay and hour reduction percentage must match The corporate officers can be included COVID Special: there is no payment into the business UI account until August (it is essentially cost-free for the business).

There have also been changes to Unemployment Claims process, including waiving the 7 day wait period to apply. If you are a business owner that has needed to lay off your workforce, please click here to go to the Department of Labor.

Click here for The Small Business Owner’s Guide to the CARES Act

Click here for RELIEF FOR WORKERS AFFECTED BY CORONAVIRUS ACT Guide 

Click here for RELIEF FOR WORKERS AFFECTED BY CORONAVIRUS ACT flowchart

Click here for RELIEF FOR WORKERS AFFECTED BY CORONAVIRUS ACT Chart

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