Wednesday, May 27, 2020

What is Governor Whitmer's Workshare Program for Partial Work/Unemployment Benefits

We know that labor has been hard hit this season because of the Covid Plague. The state is running some serious budget shortfalls and they will need to start cutting back quickly in order to survive and keep the "lights on". One of the big holes is the unemployment insurance that people were forced to use to pay their bills while they couldn't work.

The plan brought forward appears to encourage employers to start hiring people on a part-time basis. It leads to budget issues and the need to start getting people back to work. The longer we stay closes the bigger the aftermath economic costs. There has been some push and pull on opening dates but this program seems to start preparing for the necessary inevitable. 

I highlighted some of the important points. Seasonal workers are not included. I'm not sure why other than perhaps most are young or that calculating from season to season is difficult as it is not regular employment. .... it looks like this program is focused more on regular and consistent living wage kind of employment.

A couple of "Hand Out" Pieces of Information

Work Share Under Executive Order 2020-57

As a result of Governor Whitmer's Executive Order 2020-57, Michigan's Work Share program eligibility requirements have been expanded.

If business demand is down, employers participating in workshare can preserve their workforce while reducing hours and wages by 10 - 60%.
Waived the length of time requirement that employers must be in business.
Waived the requirement that employers have a current or positive balance with UIA.

Work Share Requirements:​
Employers are given flexibility to organize which employees are in a Work Share plan.
A plan must include a minimum of two employees and an employer can have multiple plans.
Plans may be approved for a period of up to 52 consecutive weeks.
Employee hours/wages may be reduced by a minimum of 10% up to a maximum 60%.
Part-time employees are eligible, but Work Share does not apply to seasonal, temporary, or intermittent employment.
Employer must obtain approval of any applicable collective bargaining unit representative.
Employers participating in Work Share cannot modify employees fringe benefits.

Under the Federal CARES Act:
Employees that receive a percent of Michigan unemployment benefits (including Work Share) also receive an additional $600 federal payment in Pandemic Unemployment Assistance through the CARES Act through July 2020.

How It Works
With the Work Share program, a worker receives a reduced salary from an employer, but is given a percent their state benefits plus the additional $600 federal benefit through July. The reduction in work hours must result in an equivalent reduction in wages.

Example: If a worker’s weekly wages are $1,000, yet the employer needs to reduce their salary/hours by 30%. Under Work Share, their weekly salary would be $700 ($1,000 – 30% = $700). Plus 30% of their state unemployment benefits ($362 maximum x .30 = $108), plus an additional $600 federal payment in Pandemic Unemployment Assistance through the CARES Act through July 2020.

With Work Share, the employee would earn $1,408/week through July 2020 vs. $962 without Work Share.

As businesses are reopened, Work Share can help employers bring back their employees from unemployment faster and allows employers to retain their workforce and avoid layoffs.

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