The Shared Work Unemployment Compensation Program provides an alternative for employers faced with a reduction in their work force. It allows an employer to divide available work or hours of work among a specific group(s) of employees in lieu of a layoff, and it allows the employees to receive a portion of their unemployment benefits while working reduced hours.
The advantages for an employer to elect to participate in the Shared Work Program Include:
- Production and quality levels are maintained.
- Rapid recovery to full capacity is possible because of the retention of an experienced workforce.
- When the economic climate improves, administrative and training costs of hiring new employees are minimized.
- Affirmative actions gains are protected.
- Employee morale remains high.
- Consumer’s spending patterns remain more stable.
- Public assistance expenditures may be lessened.
Any employer who elects to participate in the Shared Work Program must have a positive reserve account and must not have had a temporary layoff of the affected group within the four (4) month period preceding the application for the Shared Work Program.
To qualify for benefits under the Shared Work Program, employees must be regularly employed by an employer whose plan to stabilize the workforce has been approved by the Director of the Division of Workforce Services or his duly authorized representative. During the period for which benefits are payable, the following conditions must be met:
- The employees normal weekly hours of work are reduced at least ten percent.
- The employees must be monetarily eligible for regular unemployment insurance benefits and must not have exhausted their entitlement to regular UI benefits.
- The employees must file a claim and meet the eligibility requirements for regular Arkansas benefits. The employees need not:
a. Be available for work other than with the Shared Work Employer
b. Conduct an active search for work, or
c. Apply or accept work other than from the Shared Work Employer.
- The employees must be able and available to work the normal hours of work of the Shared Work Employer:
Example: The employee’s hours of work are reduced twenty percent. The employer schedules a four (4) day work week, eight (8) hours a day, Monday through Thursday. An employee requests and is granted permission to be off Tuesday. If the Shared Work Employer schedules the claimant/employee to work eight (8) hours on Friday, the claimant/employee must be able and available to work the scheduled hours.
Employees can receive up to 25 weeks of benefits through the Shared Work Program.
Employees involved in an employers’ approved Shared Work Program, if otherwise eligible, will receive that percentage of their weekly unemployment insurance benefit amount which equals the percentage of reduction in normal work hours for that week due to Shared Work. If additional hours are worked during the week in the employment of another employer(s), the combined hours of work for both employers will be used to determine the percentage reduction of their weekly unemployment insurance benefit amount. However, if the combined hours are equal to or greater than 90% of the normal weekly hours of work with the Shared Work Employer, the claimant shall not be entitled to Shared Work benefits for that week.
All claimants/employees must serve or have served a one-week waiting period. The waiting period is the first week claimed in which the claimant/employee is otherwise eligible for benefits after establishing a claim. No benefits are payable for the waiting week.
A Shared Work Plan becomes effective on the date the plan is approved or on a date mutually agreed upon by the employer and the Director of the Division of Workforce Services, but no earlier than the date of approval of the plan by the Director. It shall expire at the end of the 12th full calendar month after the effective date or on the date specified, whichever is earlier. If a plan is revoked by the Director, it shall terminate on the date specified in the Director’s written order of revocation.
Note: An employer’s plan may be revoked before the expiration date if the plan is not carried out according to its terms and intent. Employees’ fringe benefits must be continued without reduction. A Shared Work Plan shall not be approved or shall be revoked if fringe benefits are reduced.