A bipartisan proposal originating in the state Senate would allow Virginia employers to temporarily reduce workers’ hours and protect their benefits, and permit the workers to receive unemployment compensation to partially replace lost wages.
Senate Bill 110 would make Virginia the latest state with a “shared work” program, which gives businesses the flexibility to reduce hours rather than lay off workers during economic downturns. The Senate Commerce and Labor Committee advanced the legislation Monday, setting up a vote by the full Senate.
The Senate passed an identical bill without opposition last year, but the House of Delegates shelved the measure.
Work share programs were in place in 27 states and the District of Columbia as of November, according to the National Conference of State Legislatures. Supporters say the programs benefit employers by allowing them to retain skilled workers when business is slow. Workers keep their jobs and benefits and collect a prorated share of the unemployment benefits they would have received if they had been laid off.
“This one is important to Southwest and Southside Virginia,” said Sen. Bill Stanley, R-Franklin County, a co-sponsor of the bill. “When we have these companies that employ a lot of our people in high unemployment areas, what we need to do is create an alternative to keep the workforce working.”
Stanley introduced the bill along with Democrat George Barker of Farifax County. If the measure becomes law, it would take effect Jan. 1, 2015.
Representatives of the Virginia Chamber of Commerce and the Virginia Poverty Law Center spoke in support of the bill at Monday’s committee meeting.
“We approached our members in other states that used this program to retain workers that are highly skilled and trained,” said Ryan Dunn of the Virginia Chamber of Commerce. “This is a way for them to retain them and then not have to go out and try to, when the economy gets a little better, go retrain workers.”
The Virginia Employment Commission projects that the short-term program would increase the unemployment tax per employee by an average of 19 cents for businesses that participate in the program, according to a fiscal impact analysis of the bill. Federal grant funding would cover startup costs, and the program would not affect the solvency of the unemployment trust fund.
“It is a mixed bag, no question about it, because it’s going to increase the cost incrementally,” said Sen. John Watkins, R-Powhatan, the chairman of the Commerce and Labor Committee. “But, at this time, it seems a prudent direction to go in to keep employers and employees together, and to keep business operations and business plans working together.”