New York Shared Work Program

New York’s Shared Work Program Provides a Layoff Alternative

Many businesses experience ups and downs. Sometimes this results from seasonal fluctuations. Other times from unexpected conditions. Either way, a downturn in customer demand can leave employers without enough work for their existing workforce. One option employers have is to layoff employees altogether until times improve. Another option is to reduce work hours during slow periods. New York’s Shared Work Program promotes the latter approach, potentially benefiting both employers and employees.

What is the Shared Work Program?

The New York Department of Labor administers the Shared Work Program though its Unemployment Insurance Division. Through the program, employees work a reduced schedule and receive partial unemployment benefits for the same week.

Employers must apply with the Unemployment Insurance Division to participate.

Employer Eligibility

To be eligible to apply to participate in the Shared Work Program employers must have:

  • At least 2 employees working in New York State; and
  • Paid Unemployment Insurance contributions, or elected reimbursement of benefits paid to former employee, for 4 consecutive calendar quarters.

Components of Shared Work Plans

An employer may design a Shared Work Plan to cover its total work force, particular shift(s), or work unit(s).

A proposed Shared Work Plan must:

  • Reduce work hours and corresponding wages 20 – 60%
  • Apply only to employees who normally work no more than 40 hours per week
  • Not reduce or eliminate fringe benefits (unless also doing so for the entire work force)
  • Cover a period of up to 53 weeks
  • Replace a layoff of an equal percentage of employees

If the plan affects workers subject to a collective bargaining agreement, the employees’ union(s) must also agree to participate in the Shared Work plan.

Despite the 53-week limit on a Shared Work Plan, employers can request a new plan to begin when the current one ends.

An employer cannot hire additional employees for the work group covered by the Shared Work plan. But they can replace separated employees within the covered group.

An employer with an approved plan does not have to use it each week. For weeks when employees work a full schedule, no Shared Work benefits will be paid. Employers can also change the percentage of reduction in work hours from week to week within the 20-60% range.

Employee Shared Work Program Benefits

Usually, employees can only obtain unemployment insurance benefits for weeks where they are totally or “partially” unemployed. Employees must work less than 4 days and earn less than $504 in a week to qualify for partial unemployment. Under an approved Shared Work Plan, however, employees may apply for and receive unemployment insurance benefits even though they work part of the week and exceed the partial unemployment eligibility criteria.

Although employees must be available for work for the Shared Work employer during periods of partial unemployment, they do not have to look for other work.

Employees are eligible for Shared Work benefits if they otherwise qualify for New York unemployment benefits. They may receive up to 26 weeks of regular Shared Work benefits during a benefit year.

Shared Work vs. Layoff

The Shared Work Program will not be right for all employers. However, it does offer certain advantages over layoffs in some situations, including:

  • Retains valuable employees for when business picks up.
  • Keeps employees engaged with the company and reduces skill deterioration.
  • Lessens impact on unemployment experience rating compared to total unemployment.
  • Avoids severance pay obligations, where applicable.

Employers who participate in the Shared Work Program still must consider related practical and legal ramifications. In some ways, reducing employee work hours can still have layoff-like consequences. It could affect rights under insurance policies, severance policies, other employee benefit plans, employment contracts, and collective bargaining agreements. In addition, it could still trigger a notice obligation under the WARN Acts.

This is not a comprehensive guide to the New York Shared Work Program. Interested employers can find out more information and apply on the DOL’s website. Especially if the issues in the previous paragraph are present, employers should discuss their potential participation with an attorney.

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