NEW: RI Receives $330,000 for Work Program
Wednesday, August 29, 2012
U.S. Secretary of Labor Hilda Solis today joined U.S. Senators Jack Reed and Sheldon Whitehouse and Congressman Jim Langevin and David Cicilline and Rhode Island Department of Labor and Training Director Charlie Fogarty for a tour of Safety Flag Company of America and a discussion on the latest efforts to energize U.S. manufacturing, prevent layoffs, and help businesses maintain a skilled workforce.
Thanks to a new law written by Senator Reed, Rhode Island will receive a $330,000 grant to improve its short-time compensation/layoff prevention program, commonly referred to as “WorkShare.” Rhode Island will also receive millions more in federal reimbursements for costs that were previously paid by the state. The money was made available through the bipartisan Middle Class Tax Relief and Job Creation Act of 2012, which Senator Reed helped write and President Obama signed into law in February.
Work sharing is designed to help businesses better weather hard economic times by temporarily reducing their labor costs while still keeping their existing skilled employees on the payroll. Eligible workers may receive a portion of Unemployment Insurance (UI) benefits to make up for lost wages while their hours are reduced. The program saves taxpayers by reducing unemployment and gives companies the flexibility to reduce hours instead of their workforce, helping them save on rehiring costs while employees keep their jobs.
Safety Flag Company of America is a family-owned business that has been manufacturing high-visibility and reflective products in Rhode Island since 1953. They have 26 employees and successfully utilized WorkShare to avoid layoffs and have since returned to full staffing levels.
“Rhode Island’s cost-effective WorkShare program saves jobs and benefits taxpayers, businesses, and workers. This new grant will help promote business-state partnerships to prevent layoffs, help more workers earn a steady paycheck, and allow companies to save when they’re forced to temporarily scale back. This is a bridge to better days and a smart alternative to mass-layoffs,” said Reed, who first proposed work sharing legislation in 2009 as a policy to help protect against future recessions. “This remains a difficult economy and we need to do everything we can to help create jobs, save jobs, and give people an opportunity to earn a living. This voluntary program is a smart investment in preventing future layoffs, making recessions less severe, and helping businesses improve when the economy bounces back.”
“Because of the Rhode Island WorkShare program, Rhode Island manufacturers like Safety Flag have been able to keep workers on the payroll during tough times. We applaud Senator Reed for bringing this successful layoff aversion program to the national stage,” said Charlie Fogarty, Director of the RI Department of Labor and Training.
Already Rhode Island and 21 states and the District of Columbia have implemented similar programs, saving over 365,000 jobs since 2009.
Under Reed’s law, the federal government will provide an estimated $500 million for business-state partnerships nationwide to help prevent layoffs, including nearly $100 million in grants to implement, improve, and promote work sharing programs that was made available to states this month.
According to DLT statistics, WorkShare prevented 12,485 layoffs in Rhode Island from 2008 to 2010. Under the new law, during the next three years the state will be relieved of all work sharing payments provided it meets all requirements. If these provisions would have been in place over the previous three years, Rhode Island would have saved an estimated $36 million in state funding. Since the law was enacted in February, Rhode Island has paid out over $2 million in work sharing benefits. Thanks to Reed’s law, the state will be fully reimbursed for those expenditures.
The 22 states that currently have STC programs include: Arizona, Arkansas, California, Colorado, Connecticut, Florida, Iowa, Kansas, Maine, Massachusetts, Maryland, Minnesota, Missouri, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, and Washington. Additionally, Michigan’s Republican Governor, Rick Snyder, signed a work sharing law this summer that is scheduled to take effect in 2013.
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