In the late 1970s, California adopted an innovative idea: Employers needing to temporarily cut their payroll hours due to decreased demand for their products or services could reduce employees' hours across the board rather than laying off a portion of their work force.
The employees' reduced wages would be replaced by unemployment insurance for a limited time until the employer is able to restore the cut hours.
This program, known as "work sharing," is a win-win for employers and employees. For employers, it enables them to retain their skilled workers during the downturn, thereby avoiding the need to hire and train new workers when business improves.
For employees, it enables them to keep their employment and their benefits while minimizing disruptions in their household income.
Work sharing is completely voluntary. Enacting a program in Michigan would not mandate businesses to choose work sharing over layoffs, but it would give qualifying businesses the option.
It also would not create additional taxes for businesses and would have a negligible effect on the unemployment insurance trust fund (since workers receiving benefits through work sharing would be receiving them otherwise due to layoffs).
Today, 24 states have work-sharing programs. New Jersey and Maine established their programs within the past month.
There are currently bills in Michigan, introduced by state Reps. Jim Ananich, D-Flint, and Vince Gregory, D-Southfield, to establish a work-sharing program in Michigan.
Work sharing has bipartisan support around the country and in Michigan. Gov. Rick Snyder included it in his work force development agenda. Both unions and members of the business community support it because it helps workers and employers weather a tough economy without creating additional taxes or hardship for businesses.
With the momentum work sharing is having across the country, and the economic realities in Michigan that continue to make businesses and workers vulnerable, now is the perfect time for this Legislature to pass the work sharing bills, HB 4516 and SB 696.
About the author: Gilda Z. Jacobs is president and CEO of the Michigan League for Human Services, a nonprofit, nonpartisan public policy group focused on the needs of low-income citizens in Michigan.
About the forum: The forum is a periodic column of opinion written by Record-Eagle readers in their areas of interest or expertise. Submissions of 500 words or less may be made by emailing letters@record-eagle.com. Please include biographical information and a photo.
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Gilda Z. Jacobs
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