Jack Reed Work-Sharing Language Passes

Little fanfare, but this work-sharing legislation will (hopefully) come to make a difference in the lives of millions of Americans by creating incentives for employers roll back hours during downturns rather than lay people off wholesale.

If you needed to cut payroll by 10%, the new law would make it more sensible to reduce everybody’s hours by 10% rather than lay off one out of ten employees.

This week, Congress passed the Middle Class Tax Relief and Job Creation Act of 2012 that carried the essential provisions of work-sharing bills proposed by Sen. Jack Reed and Rep. Rosa DeLauro. The bill would have the federal government pick up some of the expenses associated with state work-sharing programs, thereby giving them more incentive to promote work sharing….

Work sharing, or short-time compensation as it referred to in the bill, allows workers who had their hours reduced to receive benefits equal to half of their reduction in pay. From the standpoint of the worker, the employer, and the economy as a whole, it is likely to be a better outcome if workers can be kept on the job working shorter hours rather than being laid off.