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Layoff Alternative Grows in Popularity During Coronavirus

Submitted by jhartgen@abi.org on

A state-run program that helps businesses cut costs while retaining staff is becoming an increasingly common strategy to fight the economic toll of the coronavirus pandemic, the Wall Street Journal reported. State labor departments are seeing a swift increase in employer applications for programs known as workshares that allow companies to reduce worker hours and employees to collect prorated unemployment benefits to help offset lost wages, avoiding full layoffs. Such programs are available in more than half of states, which together account for about 70 percent of all U.S. payrolls. States including Texas, Oregon, Colorado, Wisconsin and Arkansas say they have experienced a rise in company applications for the programs since the coronavirus caused businesses to begin shutting down in mid-March. That has translated into a higher number of workers drawing on workshare benefits. Across the U.S., 26,000 people were receiving unemployment benefits through workshare in the week ended March 28, up from 9,000 in the same week from a year earlier, according to the Labor Department.

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