SharedWork Ohio, a seldom utilized state program in existence since 2013, could add yet another tool to an Employer’s tool belt that faces tough employment decisions in light of COVID-19.
SharedWork Ohio is a voluntary layoff aversion program that allows employers to reduce an employee’s hours between 10% percent to 50% percent each week. Once an employer has its plan approved by the Ohio Department of Job and Family Services (“JFS”), an employee works reduced hours and JFS provides the employee an unemployment benefit.
SharedWork Ohio allows employers to maintain their workforce, saving employers money by not having to recruit, train, and hire new workers.
SharedWork Ohio is open to private “contributory” employers as well as public sector “reimbursing” employers. All positions are eligible for SharedWork Ohio with the exception of employees who are seasonal, temporary, or employed on an intermittent basis.
Employers have discretion to determine which employees comprise an “affected unit” as long as each unit has at least two employees. Full-time employees in each unit must work the same percentage after the reduction in hours. Because of this, it makes sense for employers to have multiple “affected units.”
Employers must apply to participate in SharedWork Ohio through JFS and certify a number of items. In particular, an employer must continue to provide preexisting health and retirement benefits to an employee as if no reduction had occurred or to the same extent as other employees not participating in the program.
An approved SharedWork plan can last for 52 weeks. However, an employer can terminate the plan by written notice to the director. This termination option provides flexibility to employers to terminate the SharedWork program when business “gets back to normal.”
Governor DeWine has removed the “waiting week” period under Ohio law. As a result, employees working an approved SharedWork program can receive benefits immediately.
What is the interplay between SharedWork Ohio and the CARES Act?
Under Section 2108 of the CARES Act, the federal government pays states an amount equal to 100% of the amount of short-time compensation paid under a short-time compensation program under the provision of the State law. A short-time compensation program is known as a work sharing or shared-work program which an employer can use as an alternative to layoffs when experiencing a reduction in work.
SharedWork Ohio qualifies as a short-time compensation plan under Section 2108 of the CARES Act. Therefore, private employers utilizing SharedWork Ohio may not be charged for any SharedWork compensation paid to individual employees as Section 2108 of the CARES Act provides that the federal government will reimburse the State for 100% percent of the compensation paid. JFS is awaiting confirmation that the federal government will also be reimbursing Ohio at 100% percent for public sector SharedWork benefit payments (at a minimum, public sector reimbursements will be 50% percent).
SharedWork Ohio employees can also receive the $600 Federal Pandemic Unemployment Compensation (“FPUC”) payments provided under Section 2104 of the CARES Act. The federal government funds the FPUC benefits. Any employee who is eligible to receive at least $1 in underlying state unemployment benefits for the claimed week can receive the FPUC weekly $600 supplement (until July 31, 2020) in addition to their state benefits.
In summary, employees under an approved SharedWork plan would receive:
(1) Wages from the employer for the employee’s hours worked (from 50-90% of the normal schedule);
(2) The employee’s SharedWork Ohio benefit amount;
(3) The $600 FPUC supplement under Section 2104 of the CARES Act (until July 31, 2020); and,
(4) The employee maintains their current level of benefits.
The cost to the employer is the employee’s wages for the hours worked and the employee’s benefits. Employers do not pay for an employee’s SharedWork benefit amount or the $600 FPUC supplement.
Currently, JFS has approved SharedWork program applications within the same week. Developing a SharedWork Ohio program may benefit employers and avoid otherwise unavoidable employee layoffs due to the impact from COVID-19.
*Ryan Spitzer, works in Z&R’s Columbus office, and regularly advises clients on all employment matters. If you have questions about SharedWork Ohio, the CARES Act, or changes Ohio’s unemployment compensation law as a result of COVID-19, please contact Ryan at rcs@zrlaw.com or (614) 224-4411.