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Question 4: As a way of curbing the unemployment rate, California

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Question 4: As a way of curbing the unemployment rate, California has instituted a "shared-work compensations: program". Under this program, a company faced with a layoff of its workers may place its entire workforce on a four-day workweek during the period of hardship. During this period of reduced workweeks, the employees collect partial unemployment compensation benefits. When business rebounds, the firm returns to its normal five-day work-week, and the unemployment compensations benefits cease. Participation in the program must be approved by both the employer and the unions. If, however, the first is not unionized, management has the discretion of putting the plan into effect.
What are the benefits of such a share-work compensation program to (1) the employer and (2) the employees?

What advantages do you see in the operation of a share-work compensation program, especially from the viewpoint of organized labor?

Does this program effectively increase unemployment taxes for the employers in the state?


I know this is a very long question and I appreciate your help.
Submitted: 4 years ago.
Category: Multiple Problems
Expert:  MyVirtualCPA replied 4 years ago.
I am working on this and will have something to you shortly.
Customer: replied 4 years ago.
Thank you very much
Expert:  MyVirtualCPA replied 4 years ago.
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Expert:  MyVirtualCPA replied 4 years ago.
Question 4: As a way of curbing the unemployment rate, California has instituted a "shared-work compensations: program". Under this program, a company faced with a layoff of its workers may place its entire workforce on a four-day workweek during the period of hardship. During this period of reduced workweeks, the employees collect partial unemployment compensation benefits. When business rebounds, the firm returns to its normal five-day work-week, and the unemployment compensations benefits cease. Participation in the program must be approved by both the employer and the unions. If, however, the first is not unionized, management has the discretion of putting the plan into effect.
What are the benefits of such a share-work compensation program to (1) the employer and (2) the employees?

EMPLOYERS:

Production and quality levels are maintained and rapid recovery to full capacity is possible through retention of an experienced workforce.
When the economy recovers, administrative and training costs of hiring new employees are eliminated.
Affirmative action gains are protected.
Employee morale remains high.
The impact of a recession is more equitably distributed because most recently hired workers who would have been most susceptible to layoff are retained.
Employees retain their skills and advancement opportunities.
Consumer spending patterns remain more stable, which could result in a milder recession.
Public Assistance expenditures are lessened.

EMPLOYEES

Although employees experience a reduction in their income, they don't have to look for other work and go through the red tape that usually comes along with having regular unemployment benefits. They also don't have to search for another job, unless they really want to. They will also retain their benefits.

What advantages do you see in the operation of a share-work compensation program, especially from the viewpoint of organized labor?

The advantages of a share-work compensation program is that employees will keep their jobs. In terms of organized labor this is a very good way for the union to ensure the workforce isn't needlessly reduced.

Does this program effectively increase unemployment taxes for the employers in the state?

No. Although the employer's unemployment insurance premium will be impacted by the benefits just as they would for regular unemployment, these employees are only receiving a portion of what they otherwise would had the employer laid off workers. This means people keep their jobs, and thus won't rely on benefits for a long period of time.
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