As cannabis companies across the nation face the possibility of workforce reductions due to the Coronavirus pandemic, operators can consider an alternative option: Work Share Programs.
Where available, Work Share Programs provide an alternative to laying off employees by allowing them to keep working, but with fewer hours. While an employee is working fewer hours, he or she may be eligible to collect part of his or her regular unemployment benefits. Technically referred to as short time compensation, the goal of worksharing programs is to reduce unemployment.
More than half of U.S. states offer it, including many legal cannabis states. Visit Wurk's real-time map for resources and information on your state's Work Share Program.
Requirements & qualifications for employers
While requirements vary by state, there will be regulations in place to qualify for WorkShare. Here are qualifications to be considered for Colorado's program:
- You must have reduced the normal weekly work hours by at least 10 percent, but by no more than 40 percent.
- The reduction must affect at least two out of all employees in the business, or a minimum of two employees in a certain unit.
- You must have paid as much in premiums as we paid your former employees in unemployment insurance benefits.
You must apply through your state’s governing labor agency, and the reduced hours you propose must be in lieu of a layoff. Some states dictate that this hourly reduction be no more than 20% of the average workweek.
Benefits for employers
By avoiding layoffs, you’re avoiding the future costs of hiring and training new employees when your business can shift back to normal operations. Consider the regulatory headaches saved by taking this approach as well. If you employ more than 100 employees, your employment practices are governed by the federal Worker Adjustment and Retraining Notification Act (WARN), which stipulates a 60-day notification requirement for employers planning mass layoffs. Keep in mind that your state’s employment laws regarding layoffs may also add restrictions.
Cannabis employee benefits
While cutting a cannabis employee's hours makes an impact, the alternative layoff could be more significant. States have different unemployment insurance formulas, but generally, a worker being paid $600 a week, if laid off, might receive $300 in jobless benefits. With work-sharing, if that worker’s hours drop 20 percent, wages would fall to $480 and work-sharing would make up at least half of the lost wages ($60), for a total of $540 a week.
With savings from reduced income taxes and from commuting fewer days, some workers can break even. Typically, participating employers file a weekly report of each employee’s reduced hours, and a week or two later, workers receive partial unemployment benefits (source).
Visit Wurk's real-time map for resources and information on your state's Work Share Program. Always consult with your legal team when making decisions about WorkShare Programs and layoffs.