Ohio employers share the work and save jobs
Posted May 15, 2020 in Press Releases
Little-used state law is seeing a mini-explosion in the pandemic
A growing number of Ohio employers have discovered a tool to scale back operations while avoiding layoffs: Worksharing. Ohio’s shared work program allows employers to reduce employee hours by up to half. Workers then receive unemployment compensation proportionate to the hours they don’t work. Employees keep their jobs and benefits, employers avoid hiring and training new workers when demand recovers.
The Ohio Department of Job & Family Services (ODJFS) said May 7 that some 511 Ohio employers are participating, covering 24,247 employees. Altogether, ODJFS has approved 827 plans, up from just 67 on March 15. Another 95 plans covering 2,819 employees are pending. An employer may have more than one plan, and cut hours by different amounts in different operations.
“This mini-explosion demonstrates that shared work could be a valuable tool for employers of all kinds,” said Zach Schiller, Policy Matters Ohio research director. “Moreover, it can also be used by employers to bring workers back to work.”
Shared work began to help large manufacturers keep their skilled workforces even when demand slowed. However, Juliane Barone, legal counsel for ODJFS Office of Unemployment Insurance Operations, said that participating employers now come from a host of industries, including manufacturing but ranging from the public sector to retailing. Cuyahoga County Public Library has begun a plan covering 557 employees, and Cleveland Public Library has also applied for approval.
Ohio needs to do more to promote Shared Work, though it has taken some modest steps. Lt. Gov. Jon Husted has mentioned the program during the governor’s afternoon press conferences, and ODJFS features the program on the agency’s home page. Soon, Ohio will receive $2.3 million in federal support to promote the program through the Coronavirus Aid, Relief and Economic Security (CARES) Act.
“ODJFS should use federal support to widely promote this program,” Schiller said. “While it doesn’t fit every employer, it’s a proven way to reduce layoffs, and one that is especially worth considering now.”
Under the CARES Act, the federal government is picking up the full cost of unemployment benefits paid under worksharing plans in states like Ohio that already have laws covering such plans. However, it may be paying only 50% of such costs at local governments and nonprofits. That’s the same share it will pay for regular unemployment benefits at such employers, which reimburse the state trust fund for UC benefits instead of paying a quarterly tax like most private-sector employers do. “The federal government should pick up the full costs of worksharing at local governments and nonprofits,” Schiller said. “If the U.S. Department of Labor does not interpret the CARES Act that way, Congress should act to make sure that states are paid for the full worksharing benefits of these employers, too. That way it would recognize the benefit of such programs not only at for-profit companies but in the public and non-profit sectors, too.”