(Originally posted in the Michigan League for Human Services blog)
by Peter Ruark
Governor Snyder has signed a work-sharing bill that gives qualifying employers an important tool for avoiding layoffs. Rather than laying off some employees entirely, the employer reduces hours for a group of employees for a specified length of time and Unemployment Insurance benefits make up part of the employees’ lost wages. This will go into effect Jan. 1, 2013, and has a five-year sunset.
The League has published a fact sheet, Work Sharing: A Win-Win Solution for Workers and Employers that explains the new policy. As noted in the fact sheet, workers benefit from work sharing because they will have less disruption in their household income than if they are laid off. Employers benefit from work sharing because it enables them to keep their skilled workers rather than having to search for, hire and train new workers when business improves. Overall, Michigan benefits when there are fewer layoffs and less risk of some workers becoming long-term unemployed.
While this is a positive development, there still is work to be done. As a League report explained last November, Michigan’s UI program still falls short in many ways, most notably in that it only provides benefits for a maximum of 20 weeks. The new work-sharing program will not be able to help those who are laid off entirely and are unable to find work after 20 weeks of job search. But it may prevent some others from getting into that situation and is definitely a good step for Michigan.