Pennsylvania’s Shared-Work Program, From the Employer Perspective

The COVID-19 pandemic has caused an unprecedented strain on employers of all sizes across the Commonwealth.  The BSSF HR Consulting Practice wanted to share some information about Pennsylvania’s Shared-Work Program as an option for employers to reduce employee hours while still maintaining a full staff.

How a Shared-Work Plan Works

Through Pennsylvania’s Shared-Work Program, employers can temporarily reduce the work hours of a specific group of employees without experiencing layoffs.  The available work hours would be divided equally among the identified employee group.  The employees would be eligible to receive a percentage of Unemployment Compensation (UC) benefits, provided they were normally eligible for such benefits.

An employer may have more than one Shared-Work Plan (Plan); however each Plan must have a minimum of two employees.  The Plan must apply to one “affected unit” such as a department, shift or other company specific unit and all employees within the unit must receive the same reduction of hours.  Full-time employees or those working less than three months are not eligible to participate in the Plan.

Employer Advantages

Pennsylvania’s Shared-Work Program provides significant advantages to Pennsylvania employers, including:

  • Maintaining full staff, ready for increased productivity
  • Retaining experienced employees, reducing future training costs
  • Maintaining worker productivity and high employee morale

Notable Considerations

There are several notable aspects of Pennsylvania’s Shared-Work Plan that employers will want to consider, such as:

  • UC contributions may increase due to a Shared-Work Plan
  • Contributory employers may see an increase in the experience-rated portion of UC contributions due to the Shared-Work benefits that are paid
  • Reimbursable employers will be responsible for the UC benefits attributed to the employee’s service

Reducing Work Hours

The reduction of hours is called the “reduction percentage”, this must be the same for each employee within the affected unit despite the number of hours the employee normally works.  The reduction percentage is determined by the employer according to business needs; however, the decrease in hours must be a minimum of 20 percent and not more than 40 percent.

Employer Participation Requirements

To participate, employers must have all UC business current such as: all tax reports filed and paid, a positive reserve account balance for those that contribute to the fund, and employer paid wages for the last 12 consecutive quarters.

During the Shared-Work Plan period, employers cannot:

  • Hire new employees
  • Transfer current staff to the affected unit
  • Lay-off participants in the Plan
  • Reduce participating employee hours more than the reduction percentage without creating a modified plan approved by The Department of Labor and Industry, Office of Unemployment Compensation Benefits (Department)

During the Shared-Work Plan period, employers must:

  • Continue to provide fringe benefits to participating employees not covered by a collective bargaining agreement
  • Ensure participation in the Plan is in lieu of layoffs that would affect at least 10 percent of the staff in the affected unit and provide an equivalent reduction in work hours

Application Process

A Pennsylvania UC Shared-Work application must be completed by the employer.  To begin the process, visit the Unemployment Compensation Management System to access the application.  You’ll want to have your Keystone ID and password ready to login and select the Shared Work Menu at the bottom left of the page.

The application will be reviewed within 15 days of receipt.  The Department has full discretion to approve or disapprove an application.  Once the application decision has been made, the employer cannot appeal the Department’s judgement; however, a new application can be submitted.

Application Must Haves

All applications are required to include:

  • Affected unit name
  • Reduction percentage of employee hours
  • Start and end date of the reduction
  • All employee names, SSNs, normal hours and reduced hour schedules
  • Notification of time periods when the reduction in hours would be less than the reduction percentage due to equipment maintenance, holidays, vacation periods or other down times
  • Union approval of the Plan should if participating employees are covered by a collective bargaining unit

Upon Approval

The employer will submit UC applications from the employees participating in the Plan and will continue to submit these forms on a bi-weekly basis.  Should any changes occur that result in the hours being less than the reduction percentage, the employer must submit a modified application for consideration.

End of the Shared-Work Plan

The Plan will terminate on the date specified in the application.  Should the employer wish to terminate prior to the specified end date, the Office of UC Benefits Policy must be given written notice.  Please note that the Department may provide good cause for a plan to be terminated at any time.

Questions About Pennsylvania’s Shared-Work Program

Please contact the HR Consulting Practice at BSSF with any questions regarding Pennsylvania’s Shared-Work Program.

Disclaimer: This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.