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SharedWork program could help prevent layoffs in Ohio

Special to the Legal News

Published: June 20, 2012

A House bill designed to allow employers and employees to work together by reducing work hours in exchange for eliminating potential layoffs has made its way to the Senate.

House Bill 484, sponsored by Rep. Mike Duffey, R-Worthington, would create the SharedWork Ohio program.

The initiative would carve out a program for helping employers cut down on work hours in lieu of layoffs.

Companies that participate in the venture would have to submit a plan to the director of the Ohio Department of Job and Family Services that satisfies specific requirements such as guidelines for giving advance notice about reduced work weeks.

Under the bill, if a SharedWork program is approved, employees will maintain pension and health-care benefits and would be eligible to receive 26 weeks of unemployment benefits on a pro rata basis.

Duffey said HB 484 was crafted to allow employers and employees to join forces to prevent potential layoffs.

“This legislation addresses a system that is currently biased toward layoffs and instead fosters an environment of productivity and prosperity,” he said.

“Shared work corrects an important imbalance in the current state-federal unemployment system because only layoffs qualify for unemployment.”

Duffey said a bill similar to HB 484 stalled in the last General Assembly.

The proposed legislation states that SharedWork plans would be good for a single year and requires any benefits paid to an individual to be charged only to the account of the participating employer.

HB 484 also charges the ODJFS director with preparing and submitting a report to the state’s Unemployment Compensation Advisory Council evaluating the utilization and effectiveness of the program.

“Avoiding layoffs is not only good for Ohio workers and their families, but also for employers who wish to keep their talented workforce ready for a return to full work,” Duffey said.

“By sharing the burden of economic hardship, shared work exemplifies Ohioans’ reputation for willingness to help each other.”

Duffey said shared work at the federal level began with President Ronald Reagan and, more recently, has been amplified by President Barack Obama and House Speaker John Boehner.

“The history of shared work is one of bipartisanship and alliances across the political spectrum to help American workers to keep their jobs,” he said. “And this spirit is reflected in this bill.”

Christopher Ferruso, legislative director of the National Federation of Independent Business/Ohio, has expressed the organization’s support of HB 484.

“NFIB/Ohio recognizes the potential benefits of this tool allowing employers to keep their workforce employed and not potentially losing highly skilled, trained and valued workers that can be difficult to replace,” he said.

“Although the circumstances that cause the need for utilizing the program created in the bill are unfortunate, we believe it is another option to simply letting employees go.”

Ferruso said employers who would take advantage of the SharedWork program are experiencing a downturn and likely anticipate a return to normal operations.

“The bill is permissive and it is our understanding that the bill requires an employer to assume the costs associated with charges to her/his unemployment account and thus those charges will not be mutualized across all other employer accounts,” he said.

Policy Matters Ohio also has come out in support of HB 484.

Hannah Halbert, Policy Matters Ohio policy liaison and workforce researcher, said shared work is a “proven layoff aversion tool.”

“These programs increase the flexibility of the unemployment compensation system. Instead of allowing UC only to be paid to workers who are laid off, the program allows UC to also be paid to workers who face a reduction in hours,” she said.

Halbert said there would be numerous benefits to signing HB 484 into law.

“Employees can maintain much of their income, stay employed and retain their benefits. They are able to continue to meet their financial obligations and to contribute to their local economies. Employees can retain their health insurance and keep accruing retirement benefits,” she said, noting that the emotional hardship associated with layoffs would be averted.

“Employers can retain skilled employees, avoid expensive retraining and rehiring, boost employee morale and be more easily able to gear up when demand recovers.”

A co-sponsor of HB 484, Rep. Jim Buchy, R-Greenville, said he is pleased the bill has continued to move through the legislature.

“Currently, unemployment is high and these people want to work. A job will give each man and woman the dignity that comes with a job,” he said.

“Providing unemployment recipients the opportunity to work at a low cost to the employer benefits the employer and the employee by incentivizing workers to work at a lower-paying job while unemployment dollars subsidize the loss in income to the family.”

In addition to NFIB/Ohio and Policy Matters Ohio, HB 484 has also been endorsed by the Ohio Chamber of Commerce and the Ohio Manufacturer’s Association.

The bill had a hearing before the Senate Insurance, Commerce and Labor committee this week.

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