April 27, 2020
Virginia law establishes a workshare program and makes other changes in UI law
Recently enacted Virginia legislation requires the establishment a state unemployment insurance (UI) workshare program (also known as a short compensation program) by January 1, 2021. (SB 548, Chapter 1261, enacted April 22, 2020.)
SB 548 also requires all employers to file SUI contribution and wage reports electronically effective January 1, 2021. Currently, employers with 100 or more employees must file electronically.
In addition, the law:
State workshare program
Virginia Governor Northam amended SB 548 to authorize the establishment of a state workshare program to take advantage of the funding incentives provided under the federal Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).
Under the bill, the Commission must establish and implement a temporary workshare program by January 1, 2021 that meets the requirements of 22 U.S.C. § 3306(v) and all other applicable federal and state laws.
A workshare program provides an alternative to layoffs for employers experiencing a reduction in available work.
Under Virginia law, an approved workshare plan allows the employer to reduce the hours of work for employees by no less than 10% and not more than 60%. The state will pay affected employees partial UI benefits to replace a portion of their lost wages due to their reduced work hours. The program benefits employers by improving the chances that these workers will be available to resume prior employment levels when business demand increases.
Employers participating in the Virginia's workshare program are required to continue to provide employees included in the plan with any benefits that were available before their hours were reduced.
Once the Commission has its workshare program up and running, employers interested in participating must submit for the Commission's approval an application that contains specific information on the affected unit (i.e., a list of the employees that will be affected by the reduction in hours and the percentage by which their hours will be reduced). See the law's language for the specific information the employer will need to supply. The Commission will develop a standard application form.
The law also provides that the workshare program will not be effective if the Commission has not, on or before January 1, 2021, received adequate funding from the US Department of Labor to cover the costs of information technology upgrades, training, publicity, and marketing incurred by the Commission in connection with establishing the workshare program. Otherwise, the act will expire on July 1, 2022.
For general information on workshare programs, see the US Department of Labor's fact sheet.
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