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Work Share Program
What is the Work Share Program
 
Work Share is a program that offers an alternative to laying off your work force.  It allows you to keep skilled employees during slow times by reducing work hours. Eligible staff whose hours and wages are reduced receive a portion of their regular unemployment insurance benefits to compensate for the lost wages.

How the Program Works:
 
Under the Work Share program, you reduce the workweek of your staff by 20% to 40% percent.  Workers who qualify for unemployment insurance benefits receive both wages and Work Share benefits.  Workers receive a percentage of Unemployment Insurance benefits equal to the percentage of the reduction in their workweek.
 
Example:  an employer needs to reduce work hours by 20%. Instead of letting go one fifth of the work force, the firm reduces the hours of work for all its workers by 20%.  An employee who works five days a week and earns $500 would now work four days per week and earn $400.  If the employee in this example is normally eligible for $275 a week in unemployment insurance benefits, the person would receive $400 in wages and $55 in Work Share benefits for the week (20% of the $275 weekly benefit).

Eligibility Conditions
 
  • Employees must qualify for Oregon unemployment insurance benefits.
  • The plan must cover at least three employees.
  • The normal weekly hours of work and wages are reduced at least 20% and not more than 40%.
  • Employees under the plan must have worked for you continuously for six months on a full-time basis or for one year on a part-time basis just before you submit the Work Share plan.
  • Work Share plans can last no more than one year.
  • A worker can receive up to 52 weeks of Work Share benefits under a plan. The Work Share payments a worker receives are deducted from the available maximum benefit amount on their unemployment insurance claim. If there is a remaining balance, the worker may be able to draw regular benefits if needed, as long as they are otherwise eligible to receive them.
  • Persons who have used all of their regular benefits or who have an unemployment insurance claim against another state cannot receive Work Share benefits.
  • No Work Share benefits are paid if the employee works more than the reduced hours that are not within the 20 to 40 percent limitation. It may be possible for a worker to qualify for regular unemployment benefits under these circumstances if their earnings are less than their weekly unemployment benefit amount and they work less than 40 hours.
  • The employee must be available for work to the Work Share employer.

Advantages and Disadvantages
For Employers
 
Advantages
  • Maintains existing productivity and quality levels since the same employees are doing the same jobs.
  • The capability to expand business rapidly with a fully trained work force when economic conditions improve.
  • Reduces training costs because a company's work force remains intact. Workers do not have to be reassigned and retrained for new duties.
  • Reduces administrative costs. Work Share avoids changing work schedules, transfers, bumping and downgrading common in layoffs.
 
Disadvantages
  • Increased overhead costs if fringe benefits stay the same.
  • Employers who have higher tax rates will have to make additional payments to the Unemployment Trust fund.  How the Work Share plan affects your tax charges can be discussed with an Employment Department Work Share representative. 

For Employees
 
Advantages
  • Employment skills are maintained.
  • Newly hired workers remain employed rather than being laid off.
  • Reduces fringe benefit loss (primarily life and health insurance and pension rights) associated with unemployment.
 
Disadvantages
  • Senior workers may see a loss of income if their workweek is reduced. This might not occur if the employer laid off workers with less seniority.
  • Fringe benefits may be reduced along with the workweek.
  • Unemployment insurance benefits, which may be needed later in the event of a total lay off, are being used now.

Work Share and Your Tax Rate
 
Benefits paid under a Work Share plan are charged against an employer’s account in the same manner as regular unemployment insurance benefits, unless your UI tax benefit ratio exceeds your current tax rate for any tax-rating period.  In that case, you must reimburse the Unemployment trust fund an amount equal to all shared work benefits paid to your employees under the plan.  The employment department computes your benefit ratio by dividing the charges to your account by your total taxable payroll. 
 
Because participation in a Work Share plan could cause an increase in your unemployment insurance tax payments, we suggest you discuss your company’s circumstances with one of our representatives before requesting approval of a plan.
 

Frequently Asked Questions
 
Q. Can an employer have more than one plan?
A. No. However, employers may request a change to the plan by submitting a “Work Share Modification Form” (form 1734), or by making individual modifications on the employees’ weekly claim certifications.
 
Q. What may be modified on a plan during its existence?
A. Employees may be added or deleted. The hours reduced may be changed. The ending date may also be modified.
 
Q. Plans exist for one year. May they be extended?
A. No. But, a second plan may be filed right after an existing plan expires.
 
Q. Are different percentages okay for different individuals within the plan?
A. Yes. Different percentages are allowed so long as the percentage of reduction remains between 20% and 40%.
 
Q. Can an employer lay off some workers in the plan and still keep the rest?
A. Yes, because Work Share would still prevent the layoff of those who stay. On the other hand, the employer could change the plan to provide for a higher percentage reduction of hours for all workers, thus possibly eliminating the need for any layoffs.
 

Contact the Work Share Unit
 
If you have additional questions about the Work Share program, or to request an application, contact an Employment Department Work Share representative at 503-947-1649 (in Salem), or toll free at 1-800-237-3710, extension 71649.  You can also email your questions to the Work Share Unit here.