Can employees be eligible for unemployment benefits even though they are still working part-time? What is a work-share program?

Employees who remain employed or are recalled from a furlough or layoff but have their hours of work substantially reduced may be eligible for unemployment compensation. This determination varies from state to state. Unemployment eligibility requirements, such as a minimum length of employment and specified earnings in determination periods, typically still apply.

Many states realize that workers may face significant financial challenges while still employed when their pay is decreased, or their work schedules are reduced. The unemployment agencies in these states offer what are referred to as partial unemployment benefits. Employees may not realize that this option is available to them because they still hold a job.

Some states go even further and offer partial unemployment benefits through agreements with employers that are referred to as short-time compensation programs, shared work programs or work-share programs. These are voluntary arrangements between an employer and the state unemployment agency. An employer expecting to implement a reduction in hours and/or pay that will affect a group of workers should check with the state unemployment office to see whether this type of program is available. In a work-share program, the employer is able to retain skilled staff by reducing their hours instead of laying them off. Employees receive partial unemployment benefits from the state. The states save money by only paying partial unemployment benefits to employees that may have otherwise claimed full benefits.

Although employers' experience ratings for unemployment insurance can be negatively affected by claims related to partial unemployment benefits and work-share programs, thereby potentially increasing their unemployment taxes, employers benefit when employees are not distracted by financial stress and can be more productive. Also, employers may benefit by retaining trained and experienced staff who are adequately compensated in difficult times.