California's unemployment plan for employers
California's little-known Work Sharing Unemployment Insurance (WSUI) program has moved into that state's economic spotlight. Figures show that the plan - which allows hard-hit employers to reduce workweek hours and still keep all employees on the payroll -- doubled its California-worker coverage in the past 12 months to 95,500 employees.
Since 1978, when California passed the first state legislation of this type, the state's Employment Development Department has enrolled 7,500 firms in the stopgap plan. ''Greatest jump so far, though,'' says Gera Curry, EDD communications director in Sacramento, ''was this March, when we processed 226 firm applications - triple from a year ago. More and more California companies seem to be reaching out for this assistance as current economic conditions change.''
WSUI works soften the effects of unexpected plant layoffs in two ways, Curry says: It keeps the trained work force intact, at least for a maximum of 20 weeks out of any one year, and it eliminates the expense of rehiring and retraining. It also keeps production going under conditions that might otherwise cause intermittent plant shutdowns.
EDD requires firms applying under this regulation to list the number of employees to be affected, the estimated cutback in hours as a percentage of the workweek, and the number of weeks the work reduction is expected to last. For those idle days of the shortened workweek, employees are paid from unemployment insurance funds. A combination of the two paychecks usually provides workers with about 90 percent or more of their regular salary, EDD officials say.
California employers are not required to pay any surcharge for enrolling in the WSUI program; but company unemployment insurance reserve accounts must be in positive balance - with income to the state covering payouts. The WSUI application requires that, where there is a union agreement of any kind, the union bargaining agent must also sign the application.