Michigan Employers Now Have More Flexibility To Implement Work Share Plans
Governor Whitmer recently expanded unemployment benefits, most notably for access to the Work-Share Program, by issuing Executive Order 2020-57. The Work Share Program allows Michigan employers to reduce employee hours within a set unit of employees during tough times, but allows the affected employees to collect partial unemployment benefits at the same time.
Since the federal CARES Act guarantees $600 a week of supplemental unemployment to any employee who collects at least a $1 of state unemployment benefits (until July 31, 2020), Governor Whitmer’s Work Share Program expansion renders an already attractive lay-off alternative even more appealing to employers seeking to weather the current grim economic conditions without losing valuable personnel.
The Order expands the permissible parameters of a work share plan that employers must submit to the Unemployment Insurance Agency (UIA) to take part in the Work Share Program. You no longer have to provide assurances that you will not hire or transfer anyone into the affected unit of employees, but you must still assure that nobody within the unit will be laid off. If you experience an increase in business during the plan (52-week cap on length), you are now able to simply hire or transfer someone into the affected unit of employees.
You must now only certify that the plan is in lieu of layoffs that would affect at least 10% (was 15%) of the employees and result in an equivalent reduction in work hours of at least 10% (was 15%). Similarly, you can use a broader range of work reduction percentages (i.e., the percent reduction in hours applied to all affected employees in the unit) in your plan as the reduction can now be as little as 10% (down from 15%) or as much as 60% (up from 45%). Finally, you may now include employees who have been employed less than three months within the plan’s affected unit.
On a final note, the Order also renews the governor’s prior order that relaxed enforcement of the Work Share Program’s employer eligibility requirements. Most notably, this means that employers that have been in business less than three years are now eligible to apply for the Work Share Program.
Practical Advice Moving Forward
Before you rush to submit a plan to be in the Work Share Program, there are a few things to keep in mind. First, you must give assurance that nobody in the affected unit will be laid off. For this reason, the Work Share Program should likely not be utilized by employers who cannot commit to keeping employees on at current revenue levels.
Second, you can have multiple plans (e.g., one for customer-facing salespeople and one for sales support staff). However, the more plans you have, the more regular your reporting requirements will be.
Finally, you are not necessarily locked into your plan once approved by the UIA. You can apply to modify the plan at any time based on changed circumstances, and terminate the plan at any time in writing.
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This Legal Alert provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.