Work Sharing provides employers alternative to layoffs amid 61,000 unemployment insurance claim filings

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Work Sharing provides employers alternative to layoffs amid 61,000 unemployment insurance claim filings
Photo credit: California Employment Development Department

STATEWIDE – The latest data from the California Employment Development Department (EDD) shows there were 61,000 new and reopened unemployment insurance claims filed for the week ending January 7. EDD’s Work Sharing Program provides employers a temporary alternative to layoffs to help during these times of economic uncertainty.

Recent mass layoff announcements from California-based companies include Roku with a 5% workforce reduction, Cisco cutting 700 jobs, Coinbase cutting 950 jobs, Salesforce reducing 10% of its workforce, Intel cutting 200 jobs, and Google anticipating 10,000 job cuts.

Instead of laying workers off, California employers can use the Work Sharing Program which pays unemployment benefits to workers whose wages and hours have been reduced by 10 to 60 percent.

According to EDD, this option helps employers minimize or eliminate the need for layoffs in nearly all types of businesses or industries. In addition, it allows them to keep trained employees and quickly recover when business conditions improve.

The program reduces financial hardships for employees who will receive unemployment benefits and be able to keep their current job.

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For example, instead of laying off five workers, employers can reduce the schedules of 25 workers by 20 percent. These employees would be eligible for unemployment benefits to supplement lost wages. 

In addition, work sharing allows for flexibility. 

Employees may be rotated so different workers have reduced hours and wages each week. The employer determines which employees will participate in work sharing and which weeks will have hour and wage reductions. 

“Work Sharing positively affects employee morale and loyalty. When the economy improves you won’t have to hire and train new workers. It also has less impact on your unemployment taxes than a full layoff,” says an EDD Work Sharing Program information guide. 

EDD encourages employers across the state to give work sharing a try. 

“It’s a win-win,” says the EDD information guide. 

For more information about the Work Sharing Program visit https://edd.ca.gov/WorkSharing

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