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Maine's New WorkFare Program Aimed at Easing the Pinch of Downsizing
06/05/2012   Reported By: Jay Field

Continued instability in the U.S. economy is putting pressure on workers and businesses alike. Employees, especially those who lost jobs during the recession, want to do whatever it takes to hold on to their new positions. Employers who've rebounded enough to add jobs, meantime, want to keep those workers through the ups and downs of what's been a bumpy economic recovery. Jay Field reports on a new program in Maine that aims to work with employees, and their companies, to accomplish these goals.

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Maine's New WorkFare Program Aimed at Easing the P Listen

It's called WorkShare. "The easiest way to have a job is to keep a job," says Diane Russell, a Democratic state representative from Portland. Russell sponsored the law that passed both houses of the Maine Legislature last year, creating the WorkShare program, which began operating this week.

"It allows employees to continue to stay employed. And it allows business owners to be able to weather downcycles or recessions more effectively, without losing the staff members that they have trained that have a vested interest in their company," she says.

Here's how it works. Let's say you're a manufacturer. You make parts that go into central air conditioning systems for single family homes. And you get some bad news. Your client, the AC company--well, a bunch of their clients have temporarily put off plans to build new houses. Your client says they're going into a holding pattern and won't be needing as many parts from you.

Robert Winglass, Maine's Labor Commissioner, says typically, in this situation, a manufacturer begins to fret. "Gee, I have a skilled machinist and I'm going to have to lay him off. And I don't want to," Winglass says.

With WorkShare, the company wouldn't have to. Instead of layoffs, the program allows companies to reduce the work hours of employees in a particular unit or department by 10 to 50 percent. Winglass says employees stay on the job and become eligible to collect a modified, weekly benefit from the state unemployment insurance system to offset the loss of income.

"They also retain their benefits package--the health package and probably 401Ks and all the other kinds of benefits that are associated and affiliated with their employment," he says.

So what do companies get out of the deal?

"Some of these folks that have worked for these businesses....once they're laid off they find work somewhere else and then they've lost those people that have the experienced employees they can count on to come back and do the job," says Pete Gore, of the Maine State Chamber of Commerce.

The Chamber supported the legislation creating WorkShare. To qualify for the program, a company must prove the downturn they're experiencing is temporary. It must also show that the slowdown would have resulted in the layoff of at least 10 percent of the workers in the affected unit for two to six months, and that the department does regular, full-time work.

Gore says companies that go through cyclical ups and downs will save more money in the long run by participating in WorkShare. "The employer doesn't have to go back out and start searching for workers and engage in the expense of training, particularly if the employees that they end up hiring after a big layoff aren't experienced in that workfield," Gore says. "So there's a win-win on the bottom line for both the employer and the employee, under the WorkShare."

Gore says the program isn't for every employer. Companies facing long-term downsizing, and major restructuring, wouldn't be good candidates for WorkShare. But for manufacturing, the forest products industry and other sectors in Maine that go through cyclical ups and downs, WorkShare could help companies stay competitive and avoid having to continually start from scratch with new people.


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