New Law May Help Ohio Employers Avoid Layoffs

A Human Resources E-Alert

Ohio employers faced with budgetary constraints have a new tool to help avoid layoffs. Ohio’s General Assembly passed a law that provides for partial unemployment compensation benefits to employees who experience a 10-50 percent reduction in their workweek when the reduction is voluntarily implemented by an employer as part of a state-approved “shared work” program. Most employees that will qualify for these shared work benefits would not have been eligible for unemployment compensation benefits under prior law. The law takes effect immediately.

One benefit for employers is that the payment of shared work benefits may help retain employees that would otherwise look for a new job when faced with a reduction in hours and no supplemental compensation. Moreover, the federal government is legally required to reimburse Ohio for shared work benefit payments over the next two years, which creates a significant incentive for employers to choose a shared work program over traditional layoffs. During that time period, shared work benefits will not be charged to employers’ unemployment accounts.