The Texas Shared Work Program Provides an Alternative to Layoffs
March 31, 2020 by David Denton
The Texas Workforce Commission rolled out the Shared Work program to help employers and employees experiencing a slowdown associated with COVID-19. Employers of all sizes are eligible, and both salaried and hourly employees may participate. The program is designed to assist employers by allowing them to reduce employees’ hours by at least 10%, but not more than 40%, and supplement the lost wages with unemployment benefits.
Overview of a Shared Work Plan
The Shared Work program provides employers with the flexibility to create a Shared Work plan for multiple areas of their business affected by the slowdown. Plans may be created for various departments, shifts, or units provided that there are two or more employees in the department, shift, or unit. As such, an employer may have multiple plans.
Employers further have the flexibility to stop or continue the plan. Namely, the Shared Work program allows employers to return employees to work full time for a week or two and then continue the plan.
Qualifying for Shared Work Unemployment Benefits
The Shared Work plan must be an alternative to layoffs. As mentioned above, the Shared Work program is designed to allow employers to reduce employees’ hours from 10% to 40% each week. It is important to note that the percentage of reduced hours can be different for different employees, as long as the employer maintains the 10% to 40% range of reduced weekly hours.
Employees who fall under the plan must elect to participate. To receive the benefits, employees must (1) submit their unemployment claims through Unemployment Benefits Services; (2) be eligible for regular unemployment benefits; (3) accept all work offered by the participating employer; and (4) be able and available for work with the employer. Employees who qualify for unemployment benefits under the plan, but do not wish to receive the benefit may choose not to participate.
Calculating Weekly Benefits on Shared Work
The program supplements an employee’s wages with unemployment benefits equal to the percentage reduction in the employee’s work hours up to forty hours per week. An employee who normally works overtime may not receive shared work benefits for a reduction in overtime hours.
The Texas Workforce Commission provided the following example to calculate Shared Work benefits:
- An employee is qualified to receive $400 in regular unemployment benefits. The employer cuts that employee’s hours from 40 per week to 32 per week – a 20% reduction. To determine the amount of Shared Work benefits the employee would receive, multiply $400 (the regular benefit amount) by .20 (percent reduction in hours), which equals $80.00. The eligible worker would receive $80 in Shared Work benefits each week in addition to their regular wages for the 32 hours worked.
Qualifying employees will receive both paychecks and Shared Work unemployment benefits.
Benefits Continue
Employers must continue to provide employee benefits. In other words, if an employer provides health insurance, retirement benefits, paid vacation, holiday or sick leave, then the employer must continue to provide these benefits.
Applying for a Shared Work Plan
Employers may log on to Employer Benefits Services to submit a Shared Work plan online. To complete the Shared Work plan application, employers will need:
- Company’s name, address, telephone number, fax number, and the contact information for an authorized representative with signature authority;
- TWC Tax Account Number; and
- The names and Social Security numbers of all participating employees the employer wants to enroll in the plan.
David Denton
david@brownfoxlaw.comDavid Denton brings the discipline of an Ironman triathlete to his work as a trial attorney, with broad experience in civil litigation and labor & employment matters. He has advocated for clients in both state and federal court for almost twenty years. Mr. Denton lives in Prosper with his wife, Jennifer, and two children. David enjoys competing in triathlons, fishing with his kids, and coaching their sports teams.
Learn More
