Published in Economic Development

Michigan emerges as national leader in work sharing during pandemic

BY Wednesday, August 19, 2020 04:33pm

Michigan leads the nation in the number of employees participating in work sharing, a program that allows partially laid off employees to continue working while still qualifying for a portion of unemployment benefits.

The state has seen exponential growth in work-sharing participation during the pandemic, which also has saved the state’s unemployment trust fund more than $212 million, state officials announced today. 

Michigan Department of Labor and Economic Opportunity Director Jeff Donofrio COURTSY PHOTO

As of mid July, Michigan had more than 2,500 employers and 75,820 employees — the most of any state — in work sharing, or more than 18 percent of the workforce, according to U.S. Department of Labor data. Before the pandemic, only 40 employers and fewer than 450 workers participated. 

At the height of the pandemic, nearly 97,000 employees participated.

State officials said today work sharing has served as a “creative solution” for companies during the crisis.

“Work Share has been a win-win for employers and employees as the economy continues to struggle from the COVID-19 pandemic,” Michigan Department of Labor and Economic Opportunity Director Jeff Donofrio said in a statement. “Businesses of all sizes have taken advantage of the program to reopen or keep operations going while saving thousands of dollars on payroll. More importantly, Michigan workers have been able to return to work with partial unemployment benefits making up for lost wages.”

State work sharing programs, also called “short-time compensation,” have been federally funded during the COVID-19 pandemic, while Gov. Gretchen Whitmer has issued executive orders expanding eligibility. State employees also were moved to work-sharing programs, which the state expected to save $80 million in payroll costs. Overall, work sharing has provided $450 million in benefits to Michigan workers.

For years, economists have said work sharing programs were beneficial during downturns because they help employers retain employees despite drops in demand. Also, workers can continue to collect unemployment benefits based on the amount of time they’re not working.

Researchers told MiBiz in the early weeks of the pandemic that it could help blunt the effects of widespread layoffs and recession that ensued.

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