Ohio Adopts Shared Work Program

On July 11, 2013, Ohio became the 26th state to adopt a shared work program. The “SharedWork Ohio” program gives participating employers the opportunity to reduce the number of hours worked by its employees in lieu of laying off its workforce. The benefits of this program are two-fold. Employees retain their employment and maintain their retirement and health benefits while collecting shared work compensation for the hours they lose. Employers are able to make the necessary payroll reductions while still retaining skilled workers who may have otherwise sought alternative employment, saving employers the cost of finding and training new employees.

Employers wishing to participate in the program must submit a plan to the Ohio Department of Job and Family Services. The plan must include, among other things, a description of the manner in which the employer will implement the requirements of the program, as well as a proposed reduction percentage that must be between ten percent and fifty percent. Employees of participating employers will not be required to meet the ability to work, availability for work, and work search requirements applicable to standard unemployment benefits in order to receive shared work compensation. The plan cannot be applied to seasonal, temporary, or intermittent employees.

The federal Layoff Prevention Act of 2012 provides a means by which the SharedWork Ohio program can receive significant federal funding. During time periods in which the State is fully or partially reimbursed under the Act, the accounts of participating employers will not be charged for the portion of shared work compensation paid to employees of that employer. State representatives have indicated that they hope to draw approximately $3.7 million in federal funds to cover the program’s startup costs and expect the federal government to fully reimburse the State for shared work benefit payments made through August of 2015.

The SharedWork Ohio program provides employers with a new tool to manage budgetary constraints while retaining their workforce. Interested employers should contact legal counsel to learn more about how to develop a shared work plan.