Work Sharing for Avoiding Layoffs

Work sharing is a voluntary Unemployment Insurance program that provides employers with an alternative to layoffs when they face a temporary and unexpected downturn in business. It allows employers to divide available hours of work among a group of employees instead of implementing a full layoff to a few employees. It allows employees to keep working but with fewer hours. While you are working fewer hours, you will receive partial Unemployment Insurance benefits. You may choose not to participate.

Only your employer can establish a work sharing plan. Individual employees cannot. You can notify your employer about the availability of the work sharing program. If your employer is not eligible or does not want to participate in work sharing and you are working reduced hours, you may be eligible for partial regular unemployment insurance benefits.

Yes.

• Work sharing is not intended to be a means for employers to address problems such as seasonal or cyclical shutdowns, inventory control, model changeovers, or equipment maintenance.
• Work sharing is also not intended to allow an employer to use unemployment insurance benefits to supplement the payroll on a continued basis.

To be eligible, you must:

• Be monetarily eligible for regular unemployment insurance benefits in Maryland and not have exhausted your entitlement to regular unemployment insurance benefits;
• Meet all the requirements of the law for Division of Unemployment Insurance to pay unemployment insurance benefits; in the case of work sharing, you must be able and available to work for your current employer and you do not have to look for work with another employer;
• Be able and available to work your normal work hours;
• Have worked at least three months for an employer with an approved work sharing plan; and
• Have been hired on a full-time or permanent part-time basis; temporary or seasonal workers cannot participate.

This depends on how many hours a week you work with the work sharing employer and your weekly unemployment insurance benefit amount.

• You will receive wages equal to the number of hours you work each week. If, for example, your employer reduces your hours by 20% and you work 80% of your regular hours, you will receive 80% of your regular wages from your employer.
• Your work sharing benefit payment is calculated using the percentage of the reduction of your working hours. If your working hours are reduced by 20%, then your work sharing benefit is 20% of your unemployment insurance benefit amount.

Here is an example:

• You regularly work 40 hours a week and earn $500. Your employer is reducing hours by 20%. You will receive 80% of your wages from your employer—$400 a week.
• Your unemployment insurance weekly benefit amount is $250. Work sharing benefits are 20% of the unemployment insurance benefit—$50 a week.
• Your total income for the week is $400 in wages plus $50 in benefits, or $450.
• If you have dependent children as defined for unemployment insurance, you may also be eligible for an additional $8 dependency allowance for each of up to 5 dependents.

Payments are issued through direct deposit or paper check. Work sharing benefits will not be released to an employee/work sharing claimant until the employer and the claimant certify the hours worked. The employer must submit the certifying information to the Reemployment and Trade Unit on a weekly basis.

You would be eligible for regular unemployment insurance benefits instead of work sharing benefits when you do not work any hours in a week because your work sharing employer has no work available, or you did not work for the hours allotted in your approved plan.

Because regular unemployment insurance benefits are calculated differently than work sharing benefits, you may or may not receive benefits for that week.

If you do not work any hours for your work sharing employer and you are not available for work during the week (vacation), you are not eligible for any type of unemployment insurance benefits.

• If you miss any time during a week and receive paid leave, those hours count as worked time for calculating work sharing benefits. However, you must do some work for the employer in that week.
• If you take leave that is unpaid or you fail to work all available hours, you may not be eligible for unemployment benefits during that week. For instance, if you are two hours late for work and are not paid for those two hours, you will not receive work sharing benefits for that week.

If you are represented by a union, the plan must have the agreement of the collective bargaining agent. Your employer must seek the agreement of the employees covered under the plan.

It is a requirement that benefits continue to be provided to affected employees as though their work weeks have not been reduced. However, if the employer reduces the level of benefits for its employees who are not in the work sharing program, the level of benefits may be reduced by a like amount for the employer's work sharing employees.

The Reemployment and Trade Unit will provide instructions to your employer when your plan begins. Your employer will then provide you with instructions for filing a claim. You do not need to contact the unemployment insurance office to file for your weekly work sharing benefits. If you are filing for regular unemployment insurance benefits, you must contact a local office.

While the plan is in effect, your employer is responsible for ensuring that employees in the same affected group have the same number of reduced work hours each week. If the Division of Unemployment Insurance discovers a discrepancy in claims by members in the same work unit, the plan will be revoked.

Work sharing is a voluntary Maryland Division of Unemployment Insurance program that provides an alternative to layoffs for employers confronted with a sharp, temporary decline in business. It allows an employer to decrease costs by dividing available hours of work among employees. While working reduced hours, the employees will also be eligible to receive partial unemployment insurance benefit payments based on their reduction in weekly work hours.

The Maryland General Assembly enacted legislation establishing the work sharing program in 1984. In July 2014, several modifications and changes to the 1984 law were enacted. The Unemployment Insurance Law in Maryland that covers the work sharing program includes sections 8-1201 through 8-1209.

If otherwise eligible, employees involved in an employer's approved work sharing plan will receive the percentage of their weekly unemployment insurance benefit amount equal to the percentage of reduction of work hours for that week. You will continue to pay regular wages equal to the number of hours worked each week. For example, if an employer needs to reduce work hours by 30%, the employees will be eligible for 30% of their unemployment insurance benefits.

By implementing a work sharing plan when your business encounters challenges, you can:

• Keep your skilled, trained workers
• Reduce future hiring and retraining costs
• Avoid disruption in your business operations
• Maintain worker productivity and morale

In order to receive payment from unemployment insurance, your employees must meet the eligibility requirements for regular Maryland unemployment insurance benefits. Also, part-time employees must have been hired on a permanent part-time basis, not as temporary or seasonal workers. Workers may choose not to participate.

No. Work sharing can be used in one or more departments or units. The business owner has the flexibility to choose the areas involved.

No. All participating employees in an affected unit or department must be treated equally. However, the hours of employees in different affected departments or units may be reduced by different percentages. These differences must be specified and addressed separately in the plan.

A minimum of two employees are required in order to "share the work."

No. Under the work sharing program, an employee is not required to be available or apply for other work or conduct an active search for work. Employees must be available to work all of the hours that you have available for them.

Yes. If your employees have a collective bargaining agreement, a statement of approval from the union's bargaining agent must accompany the application.

Yes. Work Sharing is not intended to be a means for employers to address problems such as seasonal or cyclical shutdowns, inventory control, model changeovers, or equipment maintenance. Also, work sharing is not intended to allow an employer to use unemployment insurance benefits to supplement the payroll on a continued basis.

Work sharing does not allow employees to participate in an approved work sharing plan if they have worked for their employer for less than three months.

The employer is responsible for ensuring that employees in the same affected group work the same number of reduced work hours. The hours worked must correspond to the reduction in the approved plan. If the Department of Unemployment Insurance discovers inconsistencies with weekly reported hours, the plan will be reviewed and may be revoked.

Yes, you must apply to launch a work sharing program, following these steps:

1. Notify your employees and the bargaining agents (if applicable) that you are applying to start for a work sharing plan.
2. Download and complete the application and participant list (Excel). Note: The plan cannot be effective for more than 6 months (26 weeks).
3. Return the application and participant list to ui.worksharing@maryland.gov 7-15 calendar days before your anticipated work sharing start date.
4. A decision will be made within 15 calendar days of receipt of the completed application. You will be notified of the final decision by email. If approved, an unemployment insurance representative will contact you with next steps.
5. If approved, the employer is required to submit a Weekly Certification Claim form of hours worked to ui.worksharing@maryland.gov on a weekly basis. This will include the employee names, information, hours worked, and verification. Employees will not need to submit a Weekly Claim to unemployment insurance. 
6. Note that you must be current with your unemployment insurance tax contributions to apply to start a work sharing program.

A work sharing plan need not affect the entire organization or location. Work sharing may be used for a portion of an employer’s operation, such as a department, shift, or individual plant. It must, however, affect equally all employees of the designated employing unit.

You should submit your application 7-15 days prior to the start date of your plan. Applications will not be reviewed that have start dates more than 15 days in the future. The effective date of the plan is a Sunday no earlier than 7 days after the plan is submitted. The expiration date can be no more than 6 months after the effective date of the plan.

All completed work sharing applications submitted by employers to the Division of Unemployment Insurance are reviewed under approval procedures set forth in section 8-1203 of the Unemployment Insurance Law of Maryland. Under normal circumstances, this process takes about 7 days to complete.

A decision is often made within 7 days of receipt of the completed work sharing application, and is generally made within 7-15 days. You will be notified of the final decision, usually by email. If approved, an unemployment insurance representative will contact you with details.

The work sharing plan application will specify the requested start date of the work sharing plan (which shall begin on a Sunday, no earlier than 7 days after the plan is submitted) and an expiration date (which is no more than 6 months after the effective date of the work sharing plan application). All requirements for approval of an employer's work sharing plan application can be found in section 8-1204 of the Unemployment Insurance Law of Maryland.

If your plan is not approved, your decision will provide the reason. All decisions are final and may not be appealed. You may submit a new application for consideration 15 days after the first denial decision.

Yes, you will certify the following prior to your application being considered for approval:

• Without the plan, I would be laying off workers. The reduced hours for all employees included in this plan equals the hours that would be lost from the laid off workers.
• The employees' health insurance, medical insurance, retirement, or any other fringe benefit in effect prior to the work sharing application will not be eliminated or diminished unless such benefits are eliminated or diminished for the entire workforce.
• Additional employees will not be hired for or transferred from the affected group for the duration of the plan.
• I have made the proposed plan or a summary available to each affected employee or, if applicable, to the collective bargaining representative for inspection. A description of how the plan was made available has been provided or, if notice of the plan was not feasible, an explanation of why advance notice was not given has been provided.
• I am aware of the potential effects on my unemployment insurance account (experience rated or reimbursable) if work sharing benefits are paid.
• I agree to furnish reports relating to proper conduct of the plan and agree to allow the unemployment insurance representative access to all records necessary to verify, monitor, and evaluate the plan prior to approval and after approval.
• I understand that the plan may be revoked if I am no longer in compliance.
• I agree that the terms and implementation of the plan are consistent with any obligation I have under federal and state laws.
• I have read and understand the work sharing application.

Payments are issued through direct deposit or paper check. Work sharing benefits will not be released to an employee/work sharing claimant until the employer and the claimant certify the hours worked. The employer must submit the certifying information to the Reemployment and Trade Unit on a weekly basis. This simple form requires the claimant's name, Social Security number, hours worked and signature.

Hours or earnings from other employment are not used to calculate work sharing benefits, as long as the unemployment insurance benefits are being paid under the work sharing plan (see below for exception).

Yes, your employees could be eligible for regular unemployment benefits if during the week:

• There are not enough work hours available to meet the hours in the plan;
• There are more work hours available than approved in the plan; or
• No work is available.

When claimants may be eligible for regular unemployment insurance benefits instead of work sharing benefits during a given week, their total benefit amount will vary based on their specific circumstances. Depending on their situation, they may receive a full benefit, a partial benefit, or no benefit at all. For weeks when regular unemployment insurance benefits are potentially payable, wages earned from all employers are considered in the benefit calculation. If a claimant's earnings exceed their weekly benefit amount, no unemployment benefits will be paid for that week.

Paid time off is considered worked time for the purpose of calculating work sharing benefits when the employee did some work during that week and the employee worked all available hours.

Yes. You may stop your plan at any time. However, there are procedures that must be followed if you restart your plan. You may return your employees to normal work hours and then return to work sharing status only one time during the plan. At the discretion of the Division of Unemployment Insurance, the plan may be stopped if you are not following the agreement or if you are found to be out of compliance. The decision to rescind a plan is final and cannot be appealed.

Work sharing benefits are charged against experience-rated employer accounts in the same manner that regular benefits are charged. For additional information please contact dluicdexperiencerating_labor@maryland.gov or call 410-767-2413.

Please email ui.worksharing@maryland.gov and a representative will contact you.

An employer can re-hire its employees and use the Work Sharing program, as the intent of the work sharing program is the stabilization of employment and an alternative to layoffs. For example, an employer may experience the adverse impact of current economic conditions, but may be unaware of the option to create a work sharing plan. That employer might become aware of the program only after employees have been laid off. Those employees can return to work under the arrangements of an approved work sharing plan application. Any unemployment insurance benefits received will be adjusted to a pro rata share based on the percentage of reduced work hours. When the business recovers, the employer can immediately restore its workforce without incurring any additional costs for hiring, training, or retraining.

Yes, a non-profit organization may be eligible for work sharing, provided the non-profit employer meets the criteria as either a covered or reimbursable employer in good standing with the State of Maryland.

An affected unit is a specified facility, department, shift, or other definable unit consisting of two or more employees to which an approved work sharing plan applies.

The employer is responsible to report the hours worked on the Weekly Claim Form that is submitted every week to the work sharing program. The employee's only obligation is to work all of the hours the employer schedules every week.

Yes, employees with variable hours may participate in a work sharing plan. The employer will report the hours worked on the Weekly Claim Form that is submitted every week to the work sharing program. The employer should ensure that when schedules fluctuate, the employees’ reduction in hours still falls within the 10-60% range to be eligible for work sharing.

There is no upper limit for the size of the employer; however, the affected unit must have at least two employees in order to participate in a work sharing plan. This requirement may be waived with good cause.

Employers can use work sharing for no more than 26 weeks in a year per unit, as this is the maximum number of weeks an employee will be eligible to receive unemployment benefits in a benefit year. When completing a work sharing application, employers must include an end date no more than 26 weeks in the future. However, employers can submit different work sharing plans that start at different times for different units.

Yes, employers can add new units by either modifying an existing plan or submitting a new plan for approval.

Employers can use work sharing for no more than 26 weeks in a year per employee unit, as this is the maximum number of weeks an employee will be eligible to receive unemployment benefits in a benefit year.

There are situations where an employee will receive benefits if they are covered by a work sharing plan, but would not receive partial benefits without a work sharing plan. To be eligible for benefits, a claimant cannot earn more wages in a week than the weekly benefit amount that they are eligible for under the unemployment insurance program. That requirement does not apply to employees covered by a work sharing program. A work sharing claimant’s benefit amount is calculated by multiplying the amount they would be eligible for by the percentage of reduction in the employee’s weekly work hours.

Work sharing applications must be submitted by the employer. Employees cannot submit an application for work sharing benefits. If a work sharing application is submitted, new employees cannot be added to the work sharing unit, and each employee’s hours must be reduced by an equal amount to all other employees in the affected unit. Employees have the option to not participate in the work sharing plan, and work sharing does not cover temporary, intermittent, or seasonal employees.

Utilizing a work sharing plan may make it easier for employees to receive benefits, and will help employers by encouraging employees to remain employed with their current employers. Employees must be able, available, and actively seeking full-time work in order to be eligible for partial unemployment benefits. If there is a work sharing plan in place, employees will only have to be able and available to work the hours that are provided to them by their work sharing employer, rather than being required to seek full-time work from other employers.

For employees who are part of a collective bargaining unit, written approval of the collective bargaining agent is required for approval of a work sharing plan. If the affected employees are not covered by a collective bargaining agreement, then notice of the plan must be provided to employees who will be subject to the plan. If advance notice of the plan is not feasible, a detailed explanation as to why advance notice is not feasible must be provided.

Exempt and salaried employees are eligible for work sharing as long as their hours are equally reduced within the same unit of employees.

No, work sharing does not cover temporary, seasonal, or intermittent employment.

Yes. Any employee that is eligible for regular unemployment insurance benefits can qualify for work sharing benefits if their employer’s work sharing plan is approved, including workers who commute to Maryland to work.