By Don McIntosh
As many as 10,000 Portland-area union members are getting paid more while working less, thanks to the creative use of a federally funded program meant to avert layoffs.
The program—known as Work Share—uses unemployment insurance funds to prevent workers from losing their jobs in the first place. The way it normally works, an employer reduces workers’ hours, and the workers collect partial unemployment benefits. Instead of laying off 20% of its workers, for example, an employer could cut its workers’ hours by 20%. Workers then get 80% of their regular pay, plus 20% of the weekly unemployment benefits they would have been entitled to if they’d been laid off. The way Work Share normally works, workers still see a reduction in income, because unemployment benefits only replace part of a worker’s income. On the other hand, workers get to maintain the health or other fringe benefits that they would lose in a layoff.
But the CARES Act, the stimulus bill Congress passed in March, totally alters the math of the Work Share program, because it awards a bonus $600 a week to every successful unemployment insurance claimant. In the example above, workers who had their hours cut 20% would collect 20% of their regular weekly unemployment PLUS $600 a week. That ends up being a big increase in income. The CARES Act also expands eligibility for the Work Share program to public employers and non-profits, which don’t necessarily pay into the regular unemployment insurance system.
Portland Public Schools
Portland Public Schools was the first big local employer to take advantage of the new rules. District leaders approached the five labor organizations that represent district employees, and the unions agreed: Since May 4, over 7,000 district employees — teachers, secretaries, custodians, and bus drivers — have been working four days a week instead of five. Employment Department officials say that’s a record for the program, which had never previously been used for more than 750 workers.
“I don’t think we could have sold our membership on it without that COVID bonus,” said Belinda Reagan, president of Portland Federation of School Professionals, American Federation of Teachers Local 111.
Under the program’s rules, a small number of employees weren’t eligible for the Work Share program, either because they were newly hired, were on a leave of absence, or were retired pensioners who’d come back to work; the unions secured a commitment that those workers would continue to be paid their usual wages.
Because the Oregon Employment Department faces such a back log, school employees haven’t received unemployment checks yet, but they’ll get all the money they’re entitled to once checks are issued. Because most school employees are only employed through June 12, the benefits will stop at that point.
Reagan said the district estimates the program will save $10 million, at a time when public schools in Oregon could face cuts in state funding because of the sudden recession.
Daimler truck plant
Daimler Trucks North America has also applied to take part in Work Share, with the cooperation of the four unions that represent its Portland truck plant workers. The problem at the Western Star truck plant has been supply chain disruptions, not the recession, says Machinists District Council W24 rep Dwain Panian. Intermittent shutdowns due to supplies running out have sent assembly line workers home several times since the plant reopened April 20. The next unpaid furlough was scheduled for June 5. If Daimler is approved to take part in Work Share, workers will actually come out ahead when they’re furloughed.
“I think it’s a great benefit, and it’s a way the company can show they’re looking out for our members,” Panian said.
State colleges next?
Oregon AFL-CIO dislocated worker specialist John Irvine and his Portland counterpart Eryn Byram of Worksystems and Labor’s Community Service Agency have spent weeks telling local union leaders about Work Share as a way to prevent layoffs. On May 20, Irvine and Byram pitched the program’s merits to more than 80 union leaders and college administrators in Oregon’s public higher education system. Service Employees Local 503 is looking to see if state universities and community colleges can take part.
Congress approved the extra $600 weekly only through the end of July, and it’s not clear if it will extend it further. The second-round stimulus bill that passed the U.S. House May 15 extended the enhanced benefit, but the bill got a cold reception in the majority-Republican Senate.