Virginia First State to Enact New Work-Sharing Law During Pandemic to Help Employers Avoid Layoffs

Washington, DC—The National Employment Law Project commends the Commonwealth of Virginia on enacting legislation to implement a work-sharing program that will help Virginia businesses avert layoffs and help workers weather the ongoing economic crisis caused by the COVID-19 pandemic.

In states that authorize work-sharing, employers that need to temporarily cut payroll—instead of laying off workers—can spread reduced hours across the board to their workers, and the workers in turn can collect a portion of their unemployment insurance benefit to make up for some of their lost wages. This makes it possible for workers to retain their jobs and benefits, and for employers to have a workforce ready to return immediately to full time when their financial situations improve.

Virginia joins 26 other states that already have work-sharing programs in place. NELP urges states to promote work-sharing not only as an alternative to layoffs, but also as a vital tool for businesses that have already sustained layoffs and are looking to secure their workforce once they are ready to begin ramping up operations again.

Crucially, work-sharing is an effective strategy to mitigate the discriminatory impact of layoffs in this crisis. Thus far, workers of color are being laid off at higher rates than white workers, a function of systemic racism that disproportionately relegates people of color to jobs and industries most likely to be impacted by closures and reductions in business.

“Work-sharing is a proven tool to help businesses and working people weather economic downturns,” said Phil Hernandez, senior policy fellow and counsel at The Commonwealth Institute for Fiscal Analysis. “Once implemented, the work-sharing program can play a critical role in saving jobs all across the Commonwealth, both during and after the COVID-19 pandemic. Thanks to swift and bipartisan action taken by policymakers, Virginia is on track to become the first state in the nation to enact a new work-sharing law since the passage of the federal CARES Act, which incentivizes these critical programs.”

To learn more about work-sharing, please see:
FAQ on work-sharing
Work-Sharing: An Alternative to Layoffs
Lessons Learned: Maximizing the Potential of Work-Sharing in the United States

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