New York employers continue to grapple with the sudden and long-term effects of the coronavirus pandemic and attendant stay-at-home and travel advisories. Much consideration has centered on what businesses can do to weather this and similar unanticipated events without losing a number of trusted and trained employees via layoffs.

An often overlooked initiative available to many New York employers is the Shared Work Program, a voluntary plan subject to the approval of the Department of Labor under which an employer may reduce employee work hours and thus the employees’ wages while the business is under temporary hardship.

The Shared Work Program:

• Applies to any department, shift or work unit within the business with two or more employees who normally work no more than 40 hours each per week.
• Reduces work hours and corresponding wages between 20% and 60%.
• Replaces the layoff of an equal percentage of the workforce.
• Covers all employees in an affected department, shift or work unit, and reduces their hours by the same percentage. The hours of employees in different departments, shifts or work units may be reduced by different percentages.
• May not reduce or eliminate fringe benefits, unless the entire workforce is subject to the same reduction or elimination.
• May not extend beyond 53 weeks.

Eligible employees may collect partial unemployment insurance benefits for up to 26 weeks that correspond to the percentage of hours lost. The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act benefits also may be attendant to implementation.

Employees of New York employers who are not participating in a Shared Work plan may nonetheless be entitled to unemployment benefits in the event their hours are reduced due to temporary business hardship. However, Shared Work allows both employers and employees greater flexibility in retention, scheduling and pay than otherwise may be available and could result in a larger benefit to the affected employee. Employers may apply for the Shared Work Program online at https://www.labor.ny.gov/.

If you wish to discuss the potential benefits of a Shared Work plan or have any questions regarding its impact on your business, please contact Wilson Elser’s Labor & Employment practice.