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Companies Choose Shared-Work Program Over Layoffs

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When there aren’t enough hours of work to go around, why not share them? That’s the premise of “shared-work” programs in seventeen states around the country. Instead of laying a few people off during a downturn in business, companies can choose to decrease the hours of all of their employees, and government provided, partial unemployment benefits can help make up for the rest. In Connecticut, more than 500 companies have gone the work-share route. Correspondent Melinda Tuhus has more.

Workers at Streich Bros., Inc., in Tacoma, Washington, taking part in the shared work program. Credit: Joe Barrentine/Tacoma News Tribune/MCT

This segment is part of a 29-minute audio program titled How We Survive: Getting Creative About Jobs.


TUHUS: When Dan Ringrose got word in the Spring of 2010 that he could get furloughed one or two days a week at his job as an installer at Lincoln Door in Rocky Hill, Connecticut – he wasn’t exactly thrilled.

Ringrose: I wasn’t sure what it was about. I’ve never been laid off or anything like that. And you hear neighbors and friends being laid off. Then they said it was only one day a week…so, hope for the best.

TUHUS: Business was slow at Lincoln Door, which installs commercial and residential overhead doors. The company had to cut payroll -but instead of laying off workers, management decided to cut back hours, and spare jobs. They used a state program called shared work, which allows employees to collect unemployment benefits for furloughed time. In the end, Ringrose works one less day a week, loses only half a day’s pay, and keeps his benefits.

Ringrose: It’s good in a way that I’m still getting paid, at least for half of that, you know, for that day, so I can still pay the bills. A little tighter, but it’s good to get a little back from everything I’ve been putting in, all the taxes and stuff over the years.

TUHUS: Ringrose works for one of over 500 companies participating in work-share programs in the U.S. At Lincoln Doors, workers’ days off are staggered. Ringrose is using his days off to get things done around the house and spend time with his two children. His wife works full time job. But it’s not a vacation for him, he says.

Ringrose: I’d rather not be in this situation, you know…I can work.

TUHUS: When the Great Recession hit the American workforce, some states were better prepared to weather the storm. Seventeen of them already had shared work programs in place, some of them since the 1970s. Connecticut didn’t get on board until the early 1990s. Neil Rohon of the Connecticut Department of Labor says they borrowed best practices from several surrounding states.

Rohon: What I’ve done with the program since I’ve been in charge since 1995, tried to make it as flexible as possible for the employers, so if it helps them, long as it’s within the framework of the regulations, we’ll allow them to do certain things.

TUHUS: Rohon says the number of participating companies increased ten fold between 2008 and 2009, covering some 20,000 workers. By mid-2010, that number deflated. But the program is still strong, says Rohon.

Rohon: Employers actually have a free hand in how they schedule their employees’ time off. Most of them want to do it in the one 8-hour work day increment, but it’s not required that they do so. What I always advise employers…scheduling the employees’ time off is totally dependent on their operating needs and demands. They might need the people to come in five days a week, but working six hours a day or something like that. A lot of them try to do it on Monday or Friday to give their employees a long weekend; they can shut down their location and save on utilities.

TUHUS: Rohon tries to get the word out about the program in different ways – but he’s sure there are companies out there that still don’t know the program exists. What do unions think of the idea? Rohon responds by snapping his fingers.

Rohon: Most companies that have unions, they sign off on the application in a minute. Generally it really is a win-win for the employers and the employees, especially for the employers that want to maintain their employees that they spent a lot of time training them, educating them, and they don’t want to lose those employees’ skills. That’s the ultimate goal of the program is employee retention.

TUHUS: Rohon acknowledges what he considers minor drawbacks to the program: One is the paperwork, though he says the application is easy to navigate. The other downside is that it might raise companies’ unemployment compensation tax rate.

(sound: DOOR OPENING AND GREETINGS TO WORKER

TUHUS:Walking through the cavernous plant the two companies share, Stachen greets the workers on a recent Monday.

Pat Stachen is the Human Resources Administrator for both Lincoln Door and it’s sister company, Hartford Technologies. The 70-year-old company makes ball bearings for everything from cars to lip gloss.

Stachen: Anything that rolls…there’s ball bearings in it.

TUHUS: Strachen says in early 2009 the company suffered a 40 percent drop in orders, as customers, hit by the recession, used up their inventories. So Hartford Technologies’  union employees began getting Fridays off that March, with all management employees following in April on staggered days off. For administrators like herself, that was a challenge.

Stachen: Even though we were on a four-day work week, we still had the same five days of work, so you had to step it up a little bit, and you had to get done what you needed to get done. The plusses were you enjoyed the springtime and the summer, and those little added projects that you had at home got done, and also you were getting paid a portion of your pay through unemployment, so it didn’t hurt as it would if you had a four-day work week and didn’t get paid. Everyone was in it. Everyone saw the turndown of the business. It just made everyone work together as a team, I think, more. And the fact that they felt that the company was doing something for them other than just saying, ‘Hey, we don’t have the work for you. We need to lay you off.’

(sound: MACHINE NOISE)

TUHUS: An employee named Roland with 50 years’ experience is running the stamping machine that shoots out the bearings.

Kevin Newcomb handles shipping for the company and is the union rep for United Auto Workers Local 367, which represents production workers. In his small office off the production floor, he explains how the steel balls get into a bearing.

(sound: LOTS OF METALLIC SNAPPING)

Newcomb: This is the outer part of the bearing; this is the inner part. As you can see in here, there’s a plastic race holding the balls. And on that machine that Roland’s working on over there, this comes down a conveyor, this plastic race gets put into the outer, then it goes to another station and this inner snaps it in there like that, so it holds all the balls in the race in there.

TUHUS: Newcomb shares Stachen’s enthusiasm for the program. He says he never got any complaints from his workers about the day off and loss of a half a days pay.

Newcomb: I liked the idea of it. At least nobody got laid off. And we did talk about it when we had the contract negotiations. I loved it. I spent a lot of time with my grandson. Oh yeah, I liked the time off.

TUHUS: A bill, the “Keep Americans Working Act” was introduced last year in Congress by Connecticut Rep. Rosa DeLauro and Sen. Jack Reed of Rhode Island, a state with one of the highest unemployment rates in the nation. DeLauro says the Connecticut program works, and she says her federal bill could actually save the government money, by paying workers to keep working.

DeLauro:  It is, I think, a fantastic model. Workers in 33 states are without these benefits. This is about thousands of jobs. This is an opportunity to expand the Work Share programs that are already in the 17 states. It standardizes the program, provides protection for employers and employees, sets up funds for states to create their own programs. We’re  hopeful that other states are going to involve themselves in this effort. It’s a temporary federal financing of 100 percent of the benefits paid to workers for up to 26 weeks, so we’d guarantee that that money would be available during this period of time.

(sound at Hartford Technologies)

TUHUS: Meanwhile, after a full year on furlough, business began picking up at Hartford Technologies and workers went back to full time in March 2010. Pat Stachen says she expects Lincoln Door to be on the program for six months at the most.  For Making Contact, I’m Melinda Tuhus.

Author: Radio Project

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