Proposed law would help Ohio companies avoid layoffs, supporters say
Dayton Daily News - March 4, 2013
This piece by Andrew J. Tobias in the Dayton Daily News gives a good overview of SharedWork Ohio, a bill working its way through the legislature that “would allow Ohio employers looking to cut costs through layoffs to instead temporarily reduce all employees’ hours by 10 to 50 percent. Meanwhile, employees could collect up to half of their missing wages through unemployment compensation until the company decides to ramp up production again.”
Ohio businesses would able to prevent layoffs and instead temporarily reduce their employees’ hours while letting them keep benefits and collect unemployment, under a bill proposed in the House.
The program — SharedWork Ohio — is similar to initiatives in 25 other states, including two nearby: Michigan passed its version of the program last June, and Pennsylvania created a SharedWork program last March.
Proponents say SharedWork would allow workers who would otherwise be laid off to keep their jobs and health benefits, while saving companies the time and money they would use re-training new workers. Companies would also save money on the higher unemployment taxes that accompany layoffs.
The proposal has bipartisan support, with State Rep. Mike Duffey, R-Worthington, as a primary sponsor.
During good times and bad alike, SharedWork would help smooth out cyclical layoffs in industries — particularly manufacturing — that traditionally ramp up and scale back production to match market demand, Duffey said.
One example of how SharedWork Ohio would work is that an employer considering laying off 20 percent of the workforce could instead opt to cut an eight-hour Friday shift out of the 40-hour work week.
Impacted employees would keep their full benefits such as health care, while collecting the equivalent of four hours of pay on Friday through the unemployment system.
“It’s kind of a no-brainer,” Duffey said.
Tobias notes that a similar bill stalled after the House passed it last year, and that it has received broad support.
Initial start-up costs of the program — about $2 million in computer programming costs to allow the state to administer SharedWork and payments to workers whose hours are reduced — would be funded by the federal government until 2015. After that, the program would be funded by the existing state unemployment compensation system.
The SharedWork bill is unusual in that although it has Republican sponsors, it originated with Policy Matters Ohio, a liberal-leaning public policy group that advocates for workers issues.
“This is a proven layoff aversion tool,” said Hannah Halbert, legislative liaison for the Policy Matters. “We know that it works in other states to help employers manage these downturns… It really helps stabilize the workforce for a lot of employers and for a lot of employees.”
The initiative also has the support of several major business groups in Ohio. Officials with Kenworth Truck Company, the largest employer in Ross County (Chillicothe), have lent their support to SharedWork Ohio.
“I think it’s a great way to allow that flexibility, and not just force an employer to lay employees off,” said Chris Ferruso, Ohio legislative director for the National Federation of Independent Businesses.
“It’s another tool to help businesses weather an economic downturn and help their workers remain employed,” said Anthony Seegers, director of labor and human resources policy for the Ohio Chamber of Commerce.