Erik Gunn

Work-Share Program Surges During Pandemic

Struggling businesses can keep employees on part time and lost wages recouped through state unemployment system.

By , Wisconsin Examiner - Feb 26th, 2021 11:21 am
When the COVID-19 pandemic caused owner Amanda Dixon to shift Lazy Susan MKE from in-person dining to takeout only, a Work-Share plan allowed the restaurant to keep four workers on part-time while unemployment insurance helped pay them for the hours they lost. (Photos courtesy of Lazy Susan MKE, from its Facebook page)

When the COVID-19 pandemic caused owner Amanda Dixon to shift Lazy Susan MKE from in-person dining to takeout only, a Work-Share plan allowed the restaurant to keep four workers on part-time while unemployment insurance helped pay them for the hours they lost. (Photos courtesy of Lazy Susan MKE, from its Facebook page)

When her Milwaukee restaurant was shuttered by the COVID-19 pandemic in the spring of 2020, Amanda Dixon was able to regroup and shift to serving takeout meals with curbside pickup.

Thanks to a federal Paycheck Protection Program (PPP) loan, she was able to keep employees working well into June at her establishment, Lazy Susan, in Milwaukee’s popular Bay View neighborhood. When that ended, she turned to another resource: the Work-Share program offered through the unemployment insurance system.

Work-Share allowed Dixon to keep four full-time employees on staff, working part-time hours. Unemployment compensation payments covered them for the hours they lost.

“It was a big help to the people that work for me,” Dixon says. “I could have just laid them off, but I didn’t want to do that. So I tried to find every way possible to get them as much money in their pockets while working at limited capacity as I could.”

The federal government sets standards for state unemployment insurance (UI) systems and allows states to offer Work-Share programs as a way to avoid or reduce layoffs during a downturn. Wisconsin has included Work-Share as part of its UI system since 2013.

Rather than furlough some employees, an employer can create a Work-Share plan through the Department of Workforce Development (DWD), temporarily shifting full-time employees to part-time hours. The participating workers collect unemployment benefits for the weekly work hours that they have lost.

U.S. Rep. Mark Pocan (D-Madison) worked to include Work-Share incentives in the federal Coronavirus Aid, Relief and Economic Security (CARES) Act that passed Congress in March 2020. Those included federal funding for the unemployment compensation being paid to participating workers, rather than drawing down the employer’s UI account. The act temporarily increased the number of work hours employers could reduce for workers taking part in the program, and made other changes that loosened restrictions and added flexibility for employers wanting to establish a Work-Share plan. The CARES Act also extended to Work-Share participants the supplemental federal unemployment pay that was part of the act.

Work-Share was a pandemic success story in Wisconsin — one made necessary by the early devastation that COVID-19 had on jobs, and made possible by the changes that Congress enacted in response to the pandemic.

“The demand for Work-Share skyrocketed in 2020,” says Amy Pechacek, the Wisconsin DWD secretary-designee. “In the four years between 2016 and 2020, Wisconsin only had 20 total Work-Share plans involving 899 participants. And then between March 15 and December 15 of 2020, we had nearly 1,000 plans that covered 34,000 participants.”

From late April through mid-July, the number of employers with Work-Share plans in a given week rose from a little more than 60 to 680. The number of workers taking part in plans went from 3,384 the week of April 20 to more than 22,800 the week of July 20, according to DWD data.

From there to the end of the year, the numbers slowly wound down.

Work-Share plans have a six-month time limit, which explains some of the decline, Pechacek says. Other employers had recovered enough to return their staff to full-time schedules. And still others ended their plans in December, probably because the CARES Act federal subsidy expired Dec. 31, she adds.

The round of new coronavirus relief legislation that Congress passed in December renewed the federal subsidy for Work-Share plans, along with a smaller federal unemployment supplement. Pechacek expects a new bounce in the number of participating companies and workers, although not to the level that it reached in 2020.

Language to implement the extended Work-Share provisions is part of legislation that Gov. Tony Evers signed Thursday. It had originally been included in the Legislature’s first bill of 2021, but got stranded when Evers vetoed that bill after Assembly Republicans added last-minute provisions that the governor said would compromise public health.

Meanwhile, Work-Share plans are central to the Rebuilding Main Street Act, which Pocan co-sponsored in Congress last year. The legislation is expected to be reintroduced later this year.

Word that Work-Share plans were getting another boost from the federal government and the state had not reached Amanda Dixon when she spoke to the Wisconsin Examiner this week about her experience with the program last year — but she welcomed the news.

Lazy Susan remains strictly curbside pickup for now, despite Milwaukee Health Department guidelines that have loosened restrictions for in-person dining. With the establishment’s small footprint combined with physical distancing rules — which Dixon supports for the safety of customers and employees — the resulting revenue wouldn’t meet the required level of staffing, she says.

“I still could open up if I wanted to, but I still choose not to,” Dixon says. “Because I care about the health and safety of my staff. And right now, this is working for us. And as long as this works, and then I’m not feeling like I’m forced to have to open up my doors, this is what we’ve been doing.”

New funding from the Paycheck Protection Program is helping her support her staff, she says, but when that funding ends, she will look at setting up a Work-Share plan again.

“It was helpful,” Dixon says. “I’m glad I found out about it. More people need to be made aware of things like this to help keep your employees employed.”

Reprinted with permission of Wisconsin Examiner.

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