What is a Workshare Plan?

Workshare, also known as “shared work” or “short-time compensation” (STC), is a beneficial program offered by some states that helps businesses navigate rough patches without laying off staff.

A workshare program enables employers to retain their skilled workforce by cutting hours rather than eliminating positions, maintaining team morale and avoiding the need and costs affiliated with hiring and training new employees. It’s a thoughtful approach that ensures businesses and their employees can weather economic downturns together.

When an employer creates a workshare program with the state, employees in the affected business unit have their hours reduced by a set amount each week but also qualify for a prorated portion of their unemployment weekly benefit amount. Workshare programs pay benefits based on the percentage reduction in hours which provides guaranteed benefits for the impacted employees.

How Does Workshare Differ From Unemployment?

1. Workshare benefits are calculated based on the percentage of reduction in wages or hours, multiplied by the weekly benefit amount. The program does not take into consideration the amount that is still being earned by the employee. This is different from regular partial unemployment benefits where the claimant will only be paid if they are earning less than the weekly benefit amount.

2. Employees identified in a workshare program do not have to look for other work because they are still “attached” to your workforce. If the employee files for regular unemployment benefits, they are required to search for work each week to qualify for benefits, opening the possibility that they leave for another employer.

Requirements:

Each state that offers a workshare program differs slightly, but the general
requirements are:

  • Hours must be reduced by at least 10-20% and no more than 40-80%
  • The percentage of reduction must be equal for all employees in the program
    • Texas is an exception to this rule
  • A minimum number of impacted employees must be met
    • Most states set the minimum number at 2 or 3, but there are exceptions
  • The employer must be current on unemployment tax filings and payments
    • Some states require that the employer have a positive reserve account
  • The employer must continue to maintain health insurance and retirement benefits for the impacted employees
  • Generally temporary, seasonal, or intermittent employees are not eligible for the plan
    • New York is an exception to this rule

What Do Employers Need to Do?

All states require an application to be filled out and approved prior to any reduction in employee hours. Once your plan is approved, you must meet weekly reporting requirements to maintain the approval status.

State Specific Laws

For state specific information, refer to the following STC programs by state document provided by Equifax

Have questions? Speak with one of our HR experts.