Coronavirus Work Share Programs, Which Pay Part-Time Employees Like Full-Time Ones, Could Help Reopen the Economy

When Claire Zielinski's boss called to invite her back to work as a restaurant server after two months of receiving unemployment benefits, the single mother in Bay City, Mi., wasn’t sure if it would be worth it.

Like millions of other out-of-work Americans, Zielinski was benefiting from the extra $600 a week the federal stimulus package set aside for unemployed workers, in addition to the traditional unemployment insurance payments the state of Michigan was sending her.

But then Zielinski's boss gave her an offer she couldn’t refuse: She could work just 23 hours per week, be paid for a full 40, and keep that $600 per week benefit until it runs out at the end of July.

The 26-year-old is one of thousands Americans participating in a “work share program” that’s put some people many in better financial standing than they were before the shutdown — at least temporarily.

“I’m definitely making more,” says Zielinski, who works for Old City Hall, a restaurant owned by Downtown Restaurant Investments, a restaurant group that helped enroll her in the offering. “The world slowed down, but my life didn’t slow down with my bills and my kid.”

Work share has been around since the 1930s: Pre-COVID-19, 27 states used it as a way for full-time employees to work part-time while also collecting partial unemployment benefits.

But language in the March CARES Act—the bill behind those $1,200 stimulus checks and small business relief loans—has made the little-known program more enticing for state governments.

Through the end of 2020, pro-rated unemployment earnings of workers whose employers are enrolled in this program will be paid by federal funds — not individual states, like before. So an employee who works three days out of her regular five-day workweek will earn 60% of her salary (while retaining her health benefits) and the federal government will pick up the tab for the remaining 40% — plus that extra weekly $600 benefit.

“It’s a way to reduce hours without laying people off,” says Susan Houseman, director of research at the Upjohn Institute for Employment Research. “Work share is most appropriate when you think businesses are going to recover. That’s the situation that we’re in right now ... businesses that are under capacity were perfectly viable a few months ago."

An untapped option

As of May, there were only about 180,000 people enrolled in work share programs; a tiny sliver of the country’s 40 million unemployment claims, according to data from the National Employment Law Project.

But as a large swaths of the U.S. preps to reopen over the coming weeks, “we’ll see a greater take-up,” Housman says.

Some states, like Illinois and Nebraska, don’t currently offer any work share programs. And business owners in states where they do exist, like New York and Oregon, are just starting to learn that this is option is available to them.

In Oregon, John Beight, executive director of human resources at the Salem-Keizer Public Schools, recently organized work share for about 3,500 of roughly 5,000 full-time employees after seeing it catch on at Portland schools nearby. Salem’s teachers, administrators, and custodians now work about 80% of their workweek while unemployment covers the rest. For most of the work share participants, Fridays are a day off — a move that will help the district save roughly $1 million per each furlough day this summer, Beight says.

Getting his employees to sign up for the program took weeks, and many had to fill out traditional unemployment applications before Oregon’s official work share application system was in place. It also took time to convince employees that their current unemployment benefits would stay intact.

“It creates anxiety because it’s an unknown,” he says.

Ronda Coltrin, who works in security at North Salem High School took some time to run her own numbers before she was convinced. “My honest initial thought was that I was concerned that the district was trying to take an easy way out,” says the 38-year-old from Lebanon, Ore.

These days, she's come to appreciate her extra day off, which she can use to catch up on chores, and tend to her five-acre farm. She also realized that working fewer days throughout the summer will help more colleagues keep their jobs once the school year starts.

“After looking into and how many jobs it could save, I was fully on board," she says.

Filling the gaps

As businesses recover, work share programs will be particularly useful to employees who have been furloughed from roles that won’t be able to offer pre-pandemic hours anytime soon, says Michele Evermore, senior policy analyst at the National Employment Law Project in Washington DC.

“It’s a way to bring people back slowly and get them back to work,” she says.

In some states, an influx of applications to this once little-known program has already created a bottleneck.

Rachel Harrison, co-founder of Lion & Lamb, a New York-based media communications firm, worked with her accounting firm to apply for the program in early May. She hopes 10 of her employees can take one day off a week, with unemployment compensation making up the wage difference. Lion & Lamb is new to this program, and as of this writing, Harrison was waiting to hear if her company got approved. “We’ve put in all the paperwork, but I don’t know what happens now,” she says.

Dave Dittenber, the Michigan-based CEO of the restaurant group who used work share funds to hire back Zielinski, says the program has helped preserve his four restaurants during an unpredictable time.

Dittenber worked with his team to create plans for every type of staffer his restaurants employ. Servers are working three to four-day weeks with unemployment kicking in 30% of their pay. With deliveries up, kitchen staff is working 80% of their full-time hours, and Uncle Sam is taking care of the other 20%.

For now, Dittenber has brought back less than half of the company’s 130 full time employees, but he anticipates using work share to re-hire the rest of his staff in the coming months.

“We want to bring back everybody,” he says.

 

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