CUMBERLAND — Maryland businesses have a longstanding, but little used, program that can help avoid laying off workers during the recession.

Sharon Mike, of the Office of Unemployment Insurance with the state Department of Labor, Licensing and Regulation, works in the Cumberland claims center. During an Economic Development Committee meeting Thursday morning at the Allegany County Chamber of Commerce building, she said more and more employers across the state, are using the state’s work-sharing program to keep a trained work force while lowering payroll expenses.

“This is a very little-known, little-used program,” Mike said to more than a dozen committee members and business professionals. We had maybe five employers use it ... until the past two years. Now, there are 75 to 80 employers” across Maryland.

The program works like this: An employer files a work-sharing program application with Mike’s office detailing how the employer wants to reduce payroll. The plan is reviewed and, ultimately, approved. Many businesses, Mike said, are choosing to eliminate 20 percent of hours worked by going to a four-day work week from a five-day work week.

The company meets its goal of reducing payroll and retaining its workers. And the full-time employees who are otherwise eligible can currently collect up to $380 of unemployment.

“It doesn’t meet the total weekly wage they used to have,” Mike said, “but for employees, just to keep their jobs is a definite plus.”

Mike said similar to an automobile owner’s auto insurance, if a claim is filed, the premium can increase the following year.

Those premiums are probably going to increase anyway, Mike said, next year. The state’s table of rates range from A, the lowest rate, to F, the highest rate. Table B has been used this year and the state is expected to use tables E or F next year, she said.

“It’s significant,” Mike said.

So are the benefits paid to individuals. The state paid out approximately $750 million in 2008. This year, that amount projects to be about $1.2 billion. The office’s reserve trust has plummeted from about $1.1 billion to $400 million, “which is nothing,” Mike said.

Mike said if a company works with a union contract, the union must also approve the work-sharing program. So far, that hasn’t been much of a problem during this economic downturn, she said.

For a company to qualify for the program, it must plan to reduce workers’ hours by at least 10 percent and have at least two full-time employees. Businesses can submit a plan that impacts one division of the company or everyone on their payroll.

“It gives the employers some options,” Mike said. “It’s an individual decision. Some employers feel better doing layoffs. It’s certainly the employer’s decision to make.”

Mike said the current economic climate gives companies a little flexibility in the plans they submit to her office.

“There are probably some plans approved now that may not have been approved previously,” Mike said. “We want to keep businesses in business.”

For employees, new eligible unemployment claims can receive a weekly maximum $410, an increase of $30, beginning Oct. 1 and a maximum of $430 beginning in October 2010.

Barb Beebe, of Allegany College of Maryland, asked how the program impacts health insurance benefits. Mike said that’s up to the individual employer.

Kim Leonard, committee chairman and president of Aircon Engineering, said many companies are using the economic crisis to downsize their work force. The recession, he said, “gives them a way to do it.”

Contact Kevin Spradlin at kspradlin@times-news.com.



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