The Shared Work Unemployment Compensation Program is an alternative to layoffs for employers faced with a reduction in available work. It allows an employer to divide the available work among a specified group of affected employees instead of a layoff. These employees receive a portion of their unemployment benefits while working reduced hours. To participate, an employer must complete an application for the affected unit within the company, and submit it to the Division of Employment Security (DES) for approval.
The DES may approve a Shared Work Plan if:
- There is an “affected unit” of three or more employees.
- The normal weekly hours of work and corresponding wages for a participating employee are reduced in the plan by not less than 20 percent and no more than 40 percent.
- The plan applies to at least 10 percent of the employees in the affected unit.
- The employer certifies that the fringe benefits provided will remain the same as if their normal hours had not been reduced, or to the same extent as other employees not participating in the Shared Work Program
- The employer certifies that the implementation of a Shared Work Plan and the resulting reduction in work hours is in lieu of a layoff that would affect at least 10 percent of the employees in the affected unit and that would result in an equivalent reduction in work hours.
- The employer has submitted all quarterly contribution and wage reports required to be filed for all past and current periods, and has paid all taxes due for all past and current periods.
Employee Eligibility Program
- An individual must accept all work offered by the participating employer for the claim period filed.
- An individual must be able to work and be available for full-time work with the participating employer.
- An individual must be eligible for regular unemployment benefits in the State of Missouri.
- No benefits will be paid to an individual who works for the participating employer more than the reduced hours specified in the plan.
Process Once the Application is Filed
If the plan is approved, the employer must complete a biweekly request for payment. The forms will continue to be mailed to the employer for each week the plan is in effect.
How will it Affect your Unemployment Tax Rate
Benefits paid under Shared Work plans are charged back against employers’ accounts for use in computing experience rates just as other benefit charges do.
An employer eligible for a tax rate based on their individual account experience rate has the potential of paying a maximum rate of 9 percent, plus any applicable increases or decreases to the rate (see contribution rate adjustment and maximum rate surcharge).
- A new employer generally becomes eligible for an experience rate after two full calendar years of liability under the law. Until then, employers choosing to enroll in the Shared Work Program who are not yet eligible for an experience rating will be assigned a rate of 9 percent, plus any applicable increases or decreases to the rate (see contribution rate adjustment and maximum rate surcharge).
- An employer who is not eligible after once becoming eligible because there were not 12 consecutive months immediately preceding the calculation date throughout which the account was chargeable for benefits will be assigned the maximum rate of 9 percent, plus any applicable increases or decreases to the rate (see contribution rate adjustment and maximum rate surcharge).
The potential for a 9 percent maximum rate, plus applicable surcharges remains in effect for the year the employer enrolls in the Shared Work Program and for three years following.