Shared Work Program

The Shared Work Unemployment Compensation Program is designed to help employers and employees. It is an alternative for employers faced with a reduction in force. It allows an employer to divide the available work or hours of work among a specified group of affected employees in lieu of a layoff, and it allows the employees to receive a portion of their unemployment benefits while working reduced hours.

Process

An interested employer may obtain a Shared Work Plan Application by contacting the Missouri Division of Employment Security, P.O. Box 3100, Jefferson City, Missouri 65104-3100, telephone (573) 751-WORK. To participate, an employer must reduce the normal weekly hours of work for an employee in the affected unit by at least 20% (but not more than 40%) and the plan must apply to at least 10% of the employees in the affected unit who meet monetary requirements for regular unemployment compensation. If the plan is approved by the Division, workers who qualify for unemployment benefits would receive both wages and Shared Work benefits. The Shared Work benefits would be that percentage of regular unemployment benefits which matches the reduction described in the employer's plan.

For example:

A firm facing a 20% reduction in production usually lays off one-fifth of its work force. Faced with this situation, a company could retain its total work force on a four-day-a-week basis. This reduction from 40 hours to 32 hours cuts production by the required 20% without reducing the number of employees. All affected employees receive their weekly wages based on four days of work and in addition, receive a portion of unemployment compensation benefits equal to 20% of the unemployment compensation weekly benefit amount payable had the employee been unemployed a full week.

An employee normally works a 40-hour week. The employer has to reduce the work schedule by 20%. The employer submits a plan and it is approved under the Shared Work Program.  In this example, if the employee qualifies for regular unemployment compensation with a weekly benefit amount (WBA) of $270:

20% x 40 hour work week = 8 hours
Employee works and earns wages for 32 hours
20% x $270 WBA = $54

The employee would receive $54 of unemployment benefits in addition to the 32 hours of wages earned from the employer.

Conditions

The Division may approve a Shared Work Plan if:

• There is an "affected unit" of not less than three employees;
• The normal weekly hours of work and corresponding wages for a participating employee are reduced in the plan by not less than 20% and no more than 40%;
• The plan applies to at least 10% of the employees in the affected unit;
• The plan describes the manner in which the participating employer treats the fringe benefits of each employee in the affected unit;
• The employer certifies that the implementation of a Shared Work Plan and the resulting reduction in work hours is in lieu of a temporary layoff that would affect at least 10% of the employees in the affected unit and that would result in an equivalent reduction in work hours;
• The employer has filed all reports required to be filed for all past and current periods and has paid all contributions due for all past and current periods.

Conditions For Shared Work Benefits:

• An individual must accept all work offered by the participating employer for the claim period filed;
• An individual must be able to work and be available for full-time work with the participating employer;
• An individual must be eligible for regular benefits in the state of Missouri;
• No benefits will be paid to an individual who works for the participating employer more than the reduced hours specified in the plan.

Application Format

Applications must contain:

• Name and Missouri account number of employer;
• Description of how fringe benefits will be affected by the plan;
• Concurrence of a bargaining representative if one exists;
• Certification that:
  1. The plan applies to at least 10% of employees.
  2. The reduction is in lieu of temporary layoffs.
• An attached listing of affected employees showing:
  1. Full names.
  2. Social security numbers.

Process Once Application is Filed:

The Division shall, in writing, approve or deny a Shared Work Plan within 30 days after the day on which the plan is received.

If approved, the plan shall remain in effect for one year beginning the first day of the week in which it was approved or a later date as specified in the Shared Work Plan. The plan can be modified if the modification(s) conforms to the basic provisions of the plan and the modification(s) is approved by the Division. Any request for modification must be given as written notice to the Division at least seven (7) days before the change becomes effective.

Once the plan is approved, a bi-weekly certification form will be mailed to the employer for completion. The bi-weekly certification forms will continue to be mailed to the employer for each week the plan is to be followed.

Will Participation Affect An Employer's Unemployment Tax Rate?

Benefits paid under Shared Work Plans are charged back against employers' accounts for use in computing general (experience) tax rates. They affect employers' tax rates in the same manner and to the same extent as other chargebacks of benefits.

• An employer eligible for a tax rate based on individual experience has the potential of paying a maximum rate of 9% plus applicable surcharge and any percentage increase/decrease.
• A new employer generally becomes eligible for an experience rate after two full calendar years of liability under the law. Until then, employers choosing to participate in the Shared Work Program who are not eligible for an experience rating will be assigned a rate of 9% plus applicable surcharge and any percentage increase/decrease.
• An employer who is not eligible after once becoming eligible because there were not 12 consecutive months immediately preceding the calculation date throughout which the account could have been charged with benefits will be assigned the maximum rate of 9% plus applicable surcharge and any percentage increase/decrease.

The potential for a 9% maximum rate remains in effect for the year the employer participates in the Shared Work Program and for three years following.