August 11, 2020

U.S. Senator Van Hollen, Maryland State Senators Hester and Rosapepe Push for Increased Work Share Participation in Maryland and Federally

While Maryland has seen a spike in work sharing applications this year, only 1.4% of unemployment claimants are currently on the Work Sharing program. By contrast, 20 of the 24 other states with work sharing programs report higher percentages of program utilization in proportion to total UI claims, placing Maryland near the bottom of the list. For example, states such as Michigan (19.0% utilization), Washington (17.1%), Kansas (15.6%), Arkansas (14.0%) and Oregon (14.0%) have been able to achieve dramatically higher program participation.

The Maryland Work Sharing program could see greater expansion if the Rebuilding Main Street Act, introduced by U.S. Senator Chris Van Hollen (D-Md.), becomes law. The bill significantly expands the payroll costs States can share with employers and includes much-needed grant relief to help businesses cover their fixed costs and adapt to social-distancing and public health requirements. 
From day one, Senators Hester and Rosapepe have recognized the importance of the Work Share program and its potential to help Maryland small businesses and nonprofits weather the economic impacts of the COVID-19 pandemic. I’ve been proud to join them in these efforts, and to introduce legislation to expand this innovative program, incentivize more businesses to participate, and provide additional grant support. I will continue working to highlight the importance of this flexible relief program and its benefits, and I hope the state will increase its efforts to ensure more Maryland businesses and non-profits can take advantage of this opportunity,” said Senator Van Hollen, who on Thursday sent a letter to Senate Leadership urging the inclusion of provisions to expand and improve Work Share in the next COVID-19 relief package. 
Data from the Michigan Department of Labor and Economic Opportunity shows dramatically increased participation in their work sharing program: increasing from 21 to 1090 employers (443 to 57,974 employees) between the end February and the end of May. In the month following the April Executive Order to expand the program alone, participation doubled (adding 515 employers and 35,603 employees). 
By averting layoffs and taking advantage of the Federal government’s 100% reimbursement for work sharing claims, these states are saving millions in their Unemployment Insurance Trust Funds. Every dollar diverted from regular unemployment to workshare in 2020 is a dollar that state trust funds do not need to recoup from employers in the coming years. For example, if Maryland unemployment levels remain at current levels, transitioning just 2% of claimants from unemployment to work sharing would save approximately $31 million this year.

“We can’t wait for legislation. Governor Hogan can immediately expand the program to the maximum allowable percentage under federal law. As they re-open, employers need to know how to use the program and how it can help keep their UI tax rate low. It is truly a triple win for employees, employers, and the State,” said Senator Hester. 

We need to expand Workshare rapidly in Maryland because it can get more people back on the job faster than traditional UI. That’s a big deal for workers, employers, and our whole economy,” said Senator Rosapepe. 

According to Professor Katharine Abraham at the University of Maryland, College Park, the states where usage of work sharing is the highest have worked hard to raise employer awareness of the work sharing option and make it as easy as possible for eligible employers to set up a work sharing plan. She comments that “work sharing can be a win for employers, a win for their employees and a win for the state,” adding, “I hope Maryland will take advantage of the lessons learned in other states that have succeeded in scaling up their work sharing programs.” 

The Maryland Department of Labor has adopted a series of recommendations, outlined in an early July letter from Maryland Senators Katie Fry Hester and Jim Rosapepe to Maryland Labor Secretary Tiffany Robinson, to expand Maryland’s highly underutilized Work Sharing program. Secretary Tiffany Robinson announced that the Department has addressed two of the four recommendations from Senators Hester and Rosapepe, including: 

  1. Completing the transition of workshare applications from traditional paper applications to an online application;
  2. Hiring additional staff to support the rollout of the program; 

The Department also said it intends to implement a third recommendation from Senators Hester and Rosapepe, utilizing a portion of its federal CARES funding to procure a vendor to aggressively market the program to Maryland businesses and increase program awareness. The fourth recommendation, expanding the percentages of worker hours eligible for partial UI compensation under workshare, requires either executive or legislative action. 

The Work Share program was passed into Maryland law in 1984. Under the program, employers trying to adjust for fluctuating or decreased demand enter into work sharing agreements with the State. Under these agreements, the employer is able to reduce hours instead of laying off employees, who then receive partial UI benefits to compensate for lost income. Due to provisions in the Federal CARES Act, the Federal Government is reimbursing 100% of State work sharing claims through the end of the year, insulating the UI Trust fund from the cost of work sharing claims. Additionally, work sharing claimants are eligible to receive additional benefits under Federal Pandemic Unemployment Compensation, the $600 plus layered on top of unemployment benefits expected to be extended in some form in coming COVID relief legislation at the Federal level.