WYPR: New 'Work Share' Program Helps Companies Avoid Layoffs (2009-07-13)

It's a bean counter's dilemma: how to trim a payroll without laying people off. The state of Maryland has a solution. It's a program called "Work Share." Enrolled companies can trim workers hours by up to 50-percent. The state makes up some of the lost wages with unemployment benefits. WYPR's Cathy Duchamp has this profile of a Belcamp Maryland company using Work Share to ride out the recession.

We're on the factory floor of the Independent Can Company:

"We're gonna go into the press room. This is probably the noisiest operations we have, simply because of the presses."

Dan Daniels is Human Resources Manager at Independent Can. The company makes decorative tins that hold everything from Hershey's Chocolate to Zippo Lighter Fluid. The pounding presses give you the sense that business is good. Not so, says Daniels. We're hearing the work of three people, instead of the standard press room crew of 30:

"In fact its really strange not having a second shift.. like at a quarter of four I'll get up to take a break or something and when I walk out of my office and look out my window its pitch black out here."

.. really strange since summer is usually the busy season for Independent Can. It's when crews stamp out holiday gift tins. Daniels says with fewer orders, permanent layoffs became a possibility for the first time in the company's 80 year history:

"You don't really like letting people go because its your trained workforce. (internal edit) Lets say in 6 or 7 months we need these people back they may or may not be available and if not we're starting from scratch again. It's about a seven month process to teach somebody how to run our can lines."

So, how to keep skilled workers, and at the same time, cut payroll? The answer for Independent Can was Work Share. Think of it as a flavor of unemployment offered by the state of Maryland. Companies that enroll in Work Share can shave a 5-day work week to 3. Companies pay for the hours worked. Workers get the rest in unemployment benefits. It's a smaller paycheck. But Daniels says at least his workers still have jobs:

"I do think it gives people a sense that we're all in this together and I'm not being singled out and laid off, what did I do to get laid off involuntarily?"

A total of 18 states have Work Share programs. Most, including Maryland's, have been around since the recessions of the early 1980s. But in this so-called Great Recession, Work Share enrollment is way up. In Maryland the increase is ten-fold:

"Right now, unfortunately for us, business is good, and that's usually not good for everybody else."

That's Tom Wendel. He runs the state's unemployment program. Wendel says about 300 Maryland companies are now enrolled in Work Share. He says it's putting more strain on the trust fund that pays out unemployment benefits:

"Maryland has a little bit over $500 million dollars in a trust fund right now, so we're looking relatively good compared to most states but money goes quickly, we're paying out almost $35 million dollars a week right now."

Work Share is only a fraction of that payout. Most of the people in the program have factory jobs. But the recession is also pushing white collar workers to Work Share: architects, retail sales people, and administrative staffers, like Sandy Iree. She's the H-R coordinator back at the Independent Can Company. Iree volunteered to go down to 4-days a week from 5. One step closer to retirement, she says.

"So this is a way to sort of try it without totally missing all my money, plus I needed the break."

..needed a break from walking long-time, loyal employees through unemployment paperwork. That's because in the end, Work Share wasn't enough to prevent layoffs at Independent Can. 21 people were told last month they don't have jobs anymore. Iree tells the story of one worker who got a pink slip:

"She said what I want to know' when she came in to me for the meeting, What I want to know is, where's fair in all this?' She was quite upset

A sober reminder that even a company founded in the Great Depression is not immune to financial struggles.