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Work Sharing: A Proposed Option to Layoffs

December 14, 2011

INDIANAPOLIS - Instead of laying people off when production slows, Indiana businesses would have a new option if a bipartisan "work sharing" bill becomes law.

Companies could opt to keep employees working but trim their hours, says state Rep. Mary Ann Sullivan, D-Indianapolis, the bill's author. Workers would keep their benefits, and state unemployment dollars would be used to make up some of the employees' lost income.

"The companies that are going to make this determination are going to be companies that do have a skilled workforce - that they know that they incur substantial cost in rehiring and retraining people once they are through a period of down activity."

Rep. Greg Steuerwald, R-Avon, is a co-author of the bill.

Under the bill, Sullivan says, companies keep operating and employees keep their jobs, benefits and nearly all their income.

"The employer opts into the program. The workers - if they're covered by an agreement - opt into it. There's information requirements if you're not covered by an agreement - just that you are going into an employer that is doing 'work shares.' "

The Department of Workforce Development would have to pre-approve "work sharing" plans by companies, Sullivan says. She has heard from many unemployed Hoosiers who would jump at the chance to be working.

"In our bill, and in many of the states, this also keeps benefits in place. So, you would be working part time, reduced hours - receiving some compensation for those reduced hours - and keep your benefits."

While unemployment funds would be tapped to help compensate employees for the reduced hours, Sullivan says, the state would save money because Workforce Development staffers would not have to account for people looking for work - because they'd still be on the job.

Derek Thomas, who has been researching "work sharing" as a policy analyst at the Indiana Institute for Working Families, says communities benefit from workers remaining on the job.

"Avoiding job losses also eases the impact on local businesses that depend on workers spending. This maintains consumption through continued wages and minimizes the domino effect of secondary job losses that inevitably result from layoffs."

According to a report from the Institute, work sharing already has been instituted in 22 states and Washington, D.C.

Leigh DeNoon, Public News Service - IN