Your company has fallen on hard times, and you have no choice but to let go of highly skilled, talented employees – who you may have a hard time tracking down or finding qualified replacements for once you’re financially able to rehire for those positions. Or is there another way? The Work Share program in Oregon (name varies in other states) offers an alternative that involves an hour reduction for multiple employees, while subsidizing partial unemployment insurance benefits to those employees. Salena De La Cruz, Project Manager at Work Share for the Oregon Employment Department, joins the podcast for a deep dive into the mission of the program, how to go about applying as an employer, what benefits employers and employees alike will receive, and highlights of recent improvements that have streamlined the program.
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MP3 File | Run Time: 22:32
Brandon: Welcome to the HR for Small Business Podcast, this is your host, Brandon Laws. Today I’m with Salena De La Cruz, a Project Manager at Work Share, and we are very glad to have her. Welcome, Salena!
Salena: Hi Brandon! Thank you.
Brandon: Today we’re going to talk about Work Share. This is your world! Can you explain to listeners what Work Share is and how it might benefit businesses?
Salena: The idea is that employers who are facing a potential layoff situation can tap into their payroll taxes to help subsidize staff pay when work hours are reduced via part-time unemployment benefits.
Brandon: Is this Oregon-based only? Do other states have something like this? Are you familiar with any of that?
Salena: Yes, actually. There are 27 states that have Work Share programs or shared work programs or short time compensation, which is what it’s otherwise known as, and Oregon is one of the lucky 27.
Brandon: So you had mentioned that this is a payroll tax thing. Could you dive in a little deeper into how this works, how it’s set up? Maybe start with employers and we could talk about the employees as well.
Salena: Yes. Basically, you reduce the hours of three or more employees by 20 to 40 percent and then that reduction is matched by a corresponding percentage of their would-be full unemployment benefit.
So instead of laying off an entire subsection of staff, they just reduce their hours by 20 to 40 percent.
Brandon: Instead of laying them off 100%, they’ll have, basically, a part-time work schedule. But are they going to get paid like they’re a 100% worker through the Work Share Program? How does the employee feel? What impact do they feel?
Salena: That’s actually a great question, Brandon, because it helps with the work-life balance, for one. Let’s say you have a single mom who is paying that extra money for childcare. This is a voluntary program, so it’s fairly flexible. But typically the way that this program works is that employees get to keep their jobs, employers retain talented staff and avoid the high cost associated with rehiring and training when the market picks up again and they need their full team at full hours again.
What this does is it allows them to subsidize a portion of their wages with unemployment benefits under the same matching 20 to 40 percent. So if the hours of an employee are reduced 20%, then they would be receiving unemployment benefits of 20% of what their total weekly benefit amount would have been.
So they’re not getting the total weekly benefit amount, they’re getting 20%. Whatever their reduction in hours is, they’re getting that percentage of their unemployment benefits.
Brandon: So in my mind, the difference between a program like this and just straight unemployment claims by an employee would be for one, with a traditional unemployment, they just don’t work for the company anymore. In Work Share, they’re getting to keep their job and so from a culture standpoint, it might help morale. Instead of laying off a portion of the workforce, now employers are able to hang on to the employees. Is how I understand it correct?
Salena: Yes, they get to keep those employees, so they don’t have to worry about paying to rehire people and retrain them. That also incurs additional costs for the employer. A great benefit for employees is that even though they have a reduction in hours, they get to maintain health and retirement benefits. That’s part of the requirement that the employer has to certify to be able to participate in this program.
Brandon: Interesting. From an employer standpoint, how does this differ from unemployment? What is the impact going to be? They’re already paying for it in taxes, I imagine. So how does this impact their UI (unemployment insurance) rating? Are there any additional costs? Basically, is there any downside to doing something like this?
Salena: There’s always a downside to a program. It’s just like with traditional layoffs, it’s going to impact their tax rates the same way that a traditional layoff would impact their tax rates. But you also have to consider that the employer has an experience rating based on their historical and/or experience of their tax account. So those can vary based on a number of items. We can’t say that ABC Company is going to only see an impact of 5.5% whereas XYZ Company is going to see an impact of 1.2%, we can’t be that specific because it really is a case by case basis, taking into consideration their account as a whole.
Brandon: Can you walk us through a scenario where maybe a certain type of employer would be perfect for this program, in cases you’ve seen? Would it be where they’re laying off a huge amount of people and this is another option for them? Or is it, I’m going to lay off about five people and now I could use this Work Share Program to keep those jobs, but just kind of reduce the hours? What’s the typical employer that you see?
Salena: I don’t know if you would actually call it a typical employer, per se. What we’re trying to do with the Work Share Program is show all employers from all different kinds of industries that this is a potential for them to utilize.
Let’s say that they have a reduction in their workforce because they normally are just constantly popping out a product and that demand isn’t there. So they have to either lay off their staff or they have to reduce hours.
When you lay off staff, the staff don’t get their benefits anymore unless they’ve applied for COBRA or something of that nature; whereas with this, the great part of it for employees is that they get to retain the health and retirement benefits. They don’t have to do the actively seeking work, which is part of a normal claim for unemployment insurance benefits. They just have to be available to their Work Share employer and that’s a benefit to the employer. They know that that staff must stay available to them. So when work picks up, they can call them back and say, Ok, we’re ready to go at full speed again.
Brandon: It sounds like this really ebbs and flows nicely with supply and demand issues that a business may run into. With that said, is this program nimble from the standpoint of it not needing a lot of lead time, where you can get people on and off the program really fast? Is there anything employers should be aware of when it comes to entering the program or exiting with certain employees?
Salena: No. That’s the great thing about our streamlined, new enhancements to the program. We really took a look at it, we talked to employers that have participated in the program and we asked, What can we do to make this better for you? We streamlined the forms, it’s not super paper-intensive for the employer anymore. What we’ve done is without doing a full-on modernization of the program itself, we’ve created fillable PDF forms that are available on our website, we’ve allowed for e-signature capability, so they can just attach it to an email, send it to us through our secure email, and we can get it done all through an electronic capacity rather than through faxing and mailing. We all know that when you mail something it could not show up at all or when you fax something you might receive a confirmation but it might have gone to the wrong phone number.
Any number of things could have happened with those things. With email, we have confirmation that they’ve been delivered, they can show us their sent folder. There are just so many different things that we tried to do to really make this an easier, user-friendly and streamlined program.
Brandon: How many employers would you say are on this program in Oregon, if you could guess?
Salena: Well, I could guess, but I will tell you!
Brandon: Oh, you actually know!
Salena: Yes, I do, I actually do a data set every month, just to see where we’re at actively. And that’s part of why we’re doing this, because we have 172 active Work Share employers in the State of Oregon and that’s a drop in the bucket in comparison to how many employers there are in the State of Oregon.
Like I said, part of the biggest pieces of feedback that we’ve received is that employers had no idea that this program existed. So they lay off their entire staff and suddenly they have all of these people that have left, looked for work elsewhere, and they have to rehire new people, creating additional money that they have to spend to rehire, retrain, go through the HR process, all of that.
Brandon: Just like acquiring a new customer is very expensive, acquiring a new employee that’s really good at what they do is also very expensive. I think right now, as unemployment is very low, you’re having supply issues with talented employees. So I could see how a program like this would be amazing. You always have kind of this ready pool of people that you’re able to hang on to. Is that what you’re seeing with a lot of the employers that you have on this program?
Salena: Yes, absolutely, because you take somebody that has been in that field for 15, 20, 30 years, and you’re having to rehire somebody into that position that only has experience of a year. I mean that’s obviously going to be a difference in how they do their work and how they have to perform and how they’re retrained. There are so many different things that are involved in that.
It’s really about loyalty because employers want to be able to maintain that loyalty and they want to be able to reward it by saying, You know what? You’ve been with us for 15 years. I’m not going to lay you off. We’re just going to reduce your hours by 20 to 40 percent. We’re still going to give you health and retirement benefits. As long as you’re available to me, you don’t have to do the work search option that is normally mandatory for a regular unemployment insurance claim.
Brandon: What employees, if any, are off limits to this program? I mean, hourly employees, exempt employees, is everybody available to participate in this program?
Salena: Yes and no. Everybody is able to apply for the program as far as employers go, because employers are the ones that apply to participate in this program. It is, like I said, a voluntary program, so it is completely optional for employees. We do find that some employees who decide to participate are thrilled at the opportunity to spend more time with their families or whatever it is that they do to find a work-life balance. So the fact that the program is optional only emphasizes that.
As far as what employers or employees that are off-limits, typically it’s seasonal workers, ones that know that they’re going to have a reduction in their work at any given time during the year or the same period of time every year. They can still apply and, like I said, we take those things case by case basis. But in those cases, seasonal employers would not be eligible.
Brandon: And just to be clear, employers are the ones that are driving this program; meaning, you said it’s optional. That’s not necessarily optional for the employees, they don’t like start the program or engage with it. The employer would work with you, set up the program and then the employee could then choose to leave or participate in the program. Is that kind of how I understand it flowing?
Salena: Yes, it’s an employer-based program. The employer drives it, they have to apply for it, they have to discuss with their employees who would be willing to participate in the program. Then they’re included on their participant list. That participant list can change from week to week, but when they start the plan it has to have a minimum of three employees participating in the plan and then that can change from week to week. Plans are good for up to one year, but must be reapplied for after that time.
Brandon: So meaning an employer can participate for a year but they need to renew it at that year?
Salena: Yes.
Brandon: Can they do it in perpetuity?
Salena: Yes, they could do it forever, if there was a need for it. But that’s still with the qualifier that they’re not a seasonal employee, because if they know that every year they’re going to be reducing their work force, that’s typically a red flag that they’re a seasonal worker and we start looking into those cases.
But yes, ideally, they could reapply ever year if there was a need for it.
Brandon: Have you been with the Work Share Program ever since it started? When did it start and what was the purpose of it originally? Do you think that the original mission is making its way through even to today?
Salena: The program has actually been around since 1983. So it has been around for a while.
Brandon: For a long time, yeah.
Salena: Yes. So what happened is we received a grant from the US Department of Labor to be able to improve and promote this program. As part of the improvement of the program, we ran it through our Lean Six Sigma to make it more efficient.
One of the things that changed was it went from a one-person team—
Brandon: Oh my gosh. Oh, I feel bad for that person!
Salena: Yes! And imagine in 2012 when we hit that low point. We had over 800 plans during that time and one person bringing all of those claims in, processing them, handling every claim.
So as part of the Lean Six Sigma, we streamlined it to a unit. So we now have a unit called the UI Special Program Center that processes claims, that works with our employees, they’re subject matter experts and they’re amazing. They’re great at what they do and the turnaround time for them to get back to people is really quick.
I know that a lot of people have a bad taste in their mouth when it comes to government. We’re trying to be an advocate for them, for their success, to keep them operating in business, to help them keep those loyal employees. We want them to be successful because ultimately that’s a success for Oregon.
Brandon: So for the employers that are on the program, are you feeling like they have a very positive experience?
Salena: Oh, absolutely. I mean there have been some growing pains with some of our new forms, but one of the bigger enhancements that we did was that an employer – let’s say they have 300 employees. Previously in the program, they had to submit a weekly certification for every single employee, and it was one certification per employee.
If they had 300 employees, they had to submit 300 certifications every single week. We made a change to that to make it more efficient for them. We now have two formats available, an Excel spreadsheet and a PDF fillable form. They can add as many employees as they need to on one form, however many pages that ends up taking, and submit that without having to submit one separate one for each individual employee, which would be 300 certifications.
Brandon: It sounds like you’re making HR managers a lot happier nowadays with streamlined, efficient processes.
Salena: Yes! I’ve worked with employers as part of payroll tax in some of my previous roles and I really want to make sure that we listen to employers, that we listen to employees. What can we do for you? What can we do to make this easier for you and not seen so much like a government program that people tend to hear about?
We want them to be successful because, ultimately, that puts money back into the economy. That puts money back into Oregon. That does great things. We all know that. So we want to be advocates for that.
As part of that, I will actually be going around to the state to different employers and different organizations doing presentations and walking them through being compliant and making sure that they’re getting the full benefits of the Work Share Program and that they understand the requirements involved in that and making sure that they’re communicating with their employees and that they all know what the plan is. Because this is going to be something that they’re going to have to come to terms with as far as learning what the processes are.
Our hope is that we can let them go move toward that after we’ve educated them and let them know how it can be successful as part of this program. That’s really what our main point is, let us help you be successful in the Work Share Program.
Brandon: Sounds like you’ve really brought a lot of awareness to the program and employers are really liking it. What about the employees? What kind of reception are the employees feeling with this program? Did they even really know it exists? What’s the overall feeling?
Salena: Well, that’s a great question, Brandon, because, actually, as one of the questions in our application for an employer to apply for the Work Share Program, they have to identify a plan to let their employees know about the program and that they’re going to be participating in it.
Now obviously you have a little bit of nervousness from employees because you hear about a reduction in hours and suddenly they start thinking about layoffs and what are they going to do for money and bills. We understand that home life because all of us have a home life. Really what we’re trying to do is make sure that they’re not only being educated about the program, the requirements and the benefits, but that they’re educating their staff, because it’s important that the employer and employee always maintain communication throughout this process and beyond that. It’s standard business practice, you want to maintain communication with your employee so you know what’s going on. If the employee has decided that they don’t want to participate in the program anymore, they’re going to go work for an employer where they’re going to get 40 hours a week or plus, then you have to communicate that to the employer so they can have you removed from the plan. Those things are very easy, it’s just a quick little form. Add that person to that list. Send it on over to us and we will remove them from the plan. Turnaround time is fairly quick.
Brandon: Earlier in the discussion I had asked you if this was just an Oregon-only program and maybe the name Work Share is specific to Oregon, but it sounded like this is funded in part by the federal government in a way, through the grant?
So you said there’s 27 states running programs like this. We have a lot of listeners across the nation and I think some are probably listening to this discussion and thinking, Wow, this sounds like a really good program. How do I learn about it in my state? Do you have any information about how to go about searching for a program like this in other states?
Salena: Work share is known by three different names. One of them is “work share”. One of them is “shared work,” not to be confused with actually sharing one job, which tends to happen! And it’s also known as “short time compensation,” which is the federal terminology for it. The Department of Labor has a website that has short time compensation on it and you can actually see which 27 states are participating in work share.
Brandon: Fantastic. Before we wrap up, I wanted to give you the last word. Anything you want to say about the program before we part ways here?
Salena: Absolutely. If people want to learn more about the program or they just want an overview, we would love for them to go to our new streamlined, reorganized website at www.OregonWorkShare.org. They can check out videos that we put up there recently. They’re brand new. We had them done in the last few months and they cover a program overview, frequently asked questions, and info graphics. It’s got some great information.
Brandon: You guys are doing an amazing job of marketing the program. I would not have suspected a government agency would be doing that kind of innovative marketing, that’s great.
Salena: And as a consumer, I looked at our website, and the long URLs that you tend to see on government agency websites are clunky at best. It’s very difficult to talk to somebody over the phone and try to give them a URL when it’s 64+ characters long! So I understand their pain. So OregonWorkShare.org, .dot, and .com have all been purchased for us to be able to utilize for the Work Share Program and to make it easy to remember and easy to get to.
Brandon: Amazing. Salena De La Cruz, Project Manager at Work Share, thank you for joining the podcast. We appreciate it and you educated me quite a bit on the program! I knew very little about it, so thank you for walking me through the entire program and giving me all the details. I appreciate it.
Salena: Thank you for the opportunity, Brandon, I really appreciate it.