Sharing Work Saves Jobs

The programs' ground rules are set by Washington, which helps with funding, but states are left to decide the details: the percentage of hours that can be reduced, duration of the program, rules for renewing it once it has run its course, and the requirement — or not — of maintaining health benefits.

Work sharing is particularly good for companies that spend years training their employees and don't want to lose that investment — if laid off, they may not be available when times improve. Because of that skill factor, the PPI study reports, work-sharing employees tend to be older (ages 35 to 64) than unemployed workers as a whole.

Good for older workers

Work sharing can be good for workers of all ages, but "it may be particularly good for older workers" because they have a difficult time finding a new job, says Sara Rix, PPI's senior strategic policy adviser. "At one time, older workers were less likely than their younger counterparts to be displaced, but that age advantage seems to have evaporated."

Skill-reliant manufacturers were the first to embrace the concept, and they remain strong participants. With the economic downturn, scores of other kinds of businesses have been trying it out: finance and health care, service industries, travel agents, and other companies across the blue- and white-collar spectrums.

At NECS, Jean Manhard's company, the program provided for most employees to work a four-day week, with benefits for the fifth day paid by Massachusetts WorkSharing. "We announced it at a company meeting in September 2009," said Ann Manning, NECS's vice president of human resources. "I could tell that the employees thought they were about to be laid off. Instead, they were thrilled that the company was able to keep them."

NECS specializes in helping customer firms with document imaging, distribution, security and storage. "This business is over 40 years old," Manning noted. "Some of our technicians have been with us for 15 or 20 years. We don't want to lose them."

Papé Group, a distributor of heavy equipment for the trucking and construction industries, had similar concerns. "We don't want to lose our workforce," said Melissa Zemp, a human resources supervisor at the company, which has 1,500 employees in 65 locations in seven states and work-sharing plans in three. Papé continues to maintain health benefits, whether the states require it or not.

Company handles the claims

Without work sharing, employers may still cut back employee hours, and employees may collect partial unemployment benefits on their own. But under work sharing, employers deal with unemployment officials, and people collecting the partial benefits aren't required to show that they're looking for work, as they would be for regular unemployment.

Next: Unions' reactions. >>