New Work Share Program Keeps Coloradans in More Jobs
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June 21, 2010
DENVER - A bill recently signed into law by Gov. Ritter is intended to help Colorado workers keep their jobs, even when employers have to cut back. The so-called "Work Share" program is voluntary for employers and encourages them to reduce hours for a large group of employees rather than laying off a smaller group. Employees who have their hours reduced have their benefits protected and can then collect a pro-rated amount of unemployment insurance to make up for the lost wages.
Rich Jones, director of policy and research for the Bell Policy Center, explains how it will work for employers that sign up for the program.
"Rather than laying one person off, you could cut the hours of five people by 20 percent. Those five employees would be able to get some unemployment insurance benefits to make up for the lost wages."
The mostly Republican opposition to the bill argued it was an inappropriate use of unemployment funds by the state that could wind up being abused by some employers. But Jones says similar programs are working well in 17 other states and are good for businesses, workers and taxpayers, who all suffer when unemployment rates rise.
The Work Share program actually saves money for the state's unemployment insurance fund, Jones points out.
"That insurance trust fund would be paying out less in benefits under Work Share than it would be if they just laid off the equivalent amount of employees."
Jones says Work Share is also helpful for companies because it keeps them from having to lay off workers who may be hard to replace when the economy improves.
"They're able to retain the workers that they need - the skilled workers they need - so they're more competitive."
The bill went into effect immediately upon signing.