Last week Senator Jack Reed (D-RI) introduced legislation that would provide employers with an alternative to layoffs. The Keep Americans Working Act (S. 1646) would encourage employers to implement temporary work share programs, and entitle those employees working reduced hours to receive proportionate unemployment benefits. According to Sen. Reed, 17 states already have work share programs in place.

Under the terms of this bill, employer participation in short-time compensation programs would be voluntary. Those participating would need to certify that reducing employees’ hours was a measure taken in lieu of implementing temporary layoffs, and submit written work share plans for state agency approval. If unionized, the employer would also need to provide a written plan describing the short-time compensation program for union approval. In addition, employers would be required to certify that the reduced hours program would not impact the receipt of health or retirement benefits. Employees whose workweeks are reduced by at least 10 percent would be eligible for the pro rata portion of unemployment compensation they would have received if totally unemployed. For a period of two years, the bill would provide states with temporary federal financing for 100 percent of the work share benefits paid to employees for up to 26 weeks.

This bill would not authorize payments to be made for work share programs implemented by employers whose workforce had been reduced by more than 20 percent in the three months leading up to the date the employer submits its short-time compensation plan for approval. Moreover, employers that hire workers on a seasonal, temporary, or intermittent basis, or those currently engaged in labor disputes would be similarly ineligible to participate. The legislation would direct the Department of Labor to establish an oversight and monitoring process for state agencies to ensure that participating employers adhere to the terms of their work share plans. Employers found in violation of their plans and/or act in bad faith by failing to retain their employees would be required to reimburse the state for the amount expended under the program.

This bill has been referred to the Senate Committee on Finance.