On Saturday, October 23, New York Governor Kathy Hochul signed an amendment to the NY Labor Law (S.17-A/A.737-A) which allows employees facing potential layoff to petition employers to participate in a shared work program. The amendment went into immediate effect.
What Is a Shared Work Program?
New York State’s shared work program offers employers an alternative to laying off employees by equally reducing the work schedule and pay of all employees or a group of employees. Shared work is an equal reduction of hours and pay between 20-60% in the same work unit in the same week, and it can “be customized to fit a variety of work situations.”
Who Is Eligible to Participate in a Shared Work Program?
Full-time, part-time, per-diem (intermittent) and seasonal employees are eligible, but employers must have a minimum of two employees to be eligible to participate in the program, and have paid unemployment insurance contributions, or elected reimbursement of benefits to former employees in lieu of contributions, for the past four consecutive calendar quarters.
What Is Required Under the Amendment?
Under the amendment, a group of employees who have been or reasonably expect to be laid off because of a reduction in force may petition their employer in writing to apply to participate in a shared work program “for purposes of avoiding such reduction in workforce or for purposes of re-hiring any former employee or employees of the employer that were laid off due to a reduction in workforce.” If employees have already been terminated from employment, they may be re-hired in order to participate in this program.
An employer must respond to any petition within seven days and must explain whether it has decided to apply to participate in a shared work program and the reasons for that decision. Employers that decide to apply for the shared work program must also share the outcome of the application. The legislation also explicitly prohibits any retaliation or adverse action against employees for exercising their rights under this law.
How Do Employers Set Up a Shared Work Program?
Employers must obtain approval from the New York Department of Labor (DOL) to participate in a shared work program by submitting their shared work plan to the DOL.
An employer’s plan must:
- Reduce work hours and corresponding wages 20 to 60 percent;
- Apply to employees who normally work no more than 40 hours per week;
- Not reduce or eliminate fringe benefits (unless such reduction applies to the entire workforce);
- Not extend beyond 53 weeks; and
- Replace a layoff of an equal number of employees.
Additionally, employers cannot hire additional employees for the work group covered by the plan.
Where a collective bargaining agreement is in effect, “the collective bargaining agent must agree to take part in the plan.”
Next Steps for Employers
Employers in should be aware of the amendment and respond accordingly to employee petitions for a shared work program.