A Quick Reference Guide for the
An Alternative to Layoffs
A shared-work plan allows an employer to temporarily reduce the work hours of a group of employees as an alternative to a layoff. Employees covered by the plan receive a percentage of their Unemployment Compensation, or UC, Weekly Benefit Amount, or WBA while they work the reduced schedule, if they are otherwise eligible for UC.
How Work Hours are Reduced
The percentage by which each employee’s work hours are reduced is called the “reduction percentage.” The employer determines the reduction percentage. It must be at least 20 percent and cannot exceed 40 percent. The reduction percentage must be the same for all employees participating in a shared-work plan. For example, if an employee normally works 40 hours per week, and the reduction percentage is 20 percent, then the employee’s hours are reduced by 20 percent and he or she would work 80 percent of 40 hours, or 32 hours per week. If an employee in the same unit works 30 hours per week, then he or she would work 80 percent of 30 hours, or 24 hours per week.
How UC Benefits are Determined
For each week included in the plan, an employee receives a percentage of his or her UC WBA equal to the reduction percentage. For example, if the employee’s WBA is $400 and the employee’s hours are reduced by 20 percent under the plan, the employee would receive 20 percent of $400 or $80 in shared-work UC.
Scope of Shared-Work Plan
A shared-work plan must apply to one “affected unit.” An affected unit is a department, shift or other organizational unit of the employer. An employer may have more than one shared-work plan.
All employees in the affected unit must participate, except that an employee who has been employed in the affected unit for less than three months or an employee who would work 40 or more hours a week under the plan may not participate. There must be at least two participating employees, determined without regard to corporate officers.
Employers Who Can Participate
An employer may participate in the Shared-Work Program if the employer meets the following requirements:
The employer has filed all reports and paid all amounts due under the UC law
If the employer is contributory, the employer has a positive reserve account balance
The employer has paid wages for the last 12 consecutive calendar quarters
Employer Responsibilities Under a Shared-Work Plan
The employer will obtain UC applications from participating employees and will submit biweekly UC claim forms for participating employees.
The employer implementing a shared-work plan will be charged for 100 percent of the UC paid to participating employees within the effective period of the plan.
Application for Approval of a Shared-Work Plan
To obtain approval for a shared-work plan, an employer must submit an application to the Office of Unemployment Compensation Benefits, or OUCB. An application can be obtained through our website at www.uc.pa.gov
. A completed application will provide the following information:
Name of the affected unit
The reduction percentage
The length of the proposed shared-work plan. A shared-work plan may be in effect for a maximum of 52 weeks
Any periods of time during the plan when the hours of work would be reduced by more than the reduction percentage due to holidays, designated vacation periods, equipment maintenance or other similar circumstance
Identity of all participating employees, including their name, Social Security Number, normal weekly hours and reduced hours
The union’s approval of the proposed plan, if participating employees are covered by a collective bargaining agreement
Employer Assurances and Certifications
The employer will not hire new employees in, or transfer employees to, the affected unit during the period of the shared-work plan
The employer will not lay off participating employees during the effective period of the shared-work plan or reduce participating employees’ hours of work by more than the reduction percentage during the effective period of the shared-work plan, except in cases of holidays, designated vacation periods, equipment maintenance or similar circumstances
The plan will not affect the fringe benefits of any participating employee not covered by a collective bargaining agreement
Implementation of the shared-work plan is in lieu of temporary layoffs that would affect at least 10 percent of the employees in the affected unit and would result in an equivalent reduction in work hours
The reduction percentage will not change during the period of the shared-work plan unless a modified plan is approved by the department
The Approval Process
OUCB will approve or disapprove the employer’s proposed plan within 15 days of receipt of the application. The decision to approve or disapprove a shared-work plan is a matter within the department’s discretion and is not appealable. However, if an application is disapproved the employer may submit a new application at any time.
A shared-work plan will begin the week after the plan is approved by OUCB.
Changing or Ending a Shared-Work Plan
An employer may apply for OUCB’s approval to modify an approved shared-work plan, if the employer’s circumstances change.
An employer may terminate an approved shared-work plan by written notice to OUCB. The department may terminate an approved plan for good cause.
Click on the “Employer Services” link on the state’s unemployment compensation website.
All necessary forms can be obtained through the website.
To Contact the Shared-Work Unit:
Office of UC Benefits
651 Boas St., Rm. 605
Harrisburg, PA 17121
Auxiliary aids and services are available upon request to individuals with disabilities.
Equal Opportunity Employer/Program