Gov. Ned Lamont is hoping to ramp up a state anti-layoff program that already has nearly quintupled since the pandemic began, helping 1,300 private companies avoid issuing pink slips.
Lamont, who announced his plans for the Department of Labor’s Shared Work program Wednesday in Middletown, also said his administration is expanding outreach because too few companies outside of manufacturing take advantage of this relief.
“This really is a pivot point for the Connecticut economy,” the governor said during an early afternoon press conference at Pegasus Manufacturing, a 133-year-old design and engineering firm participating in the program.
With schools open, flu season approaching and the weather getting colder, the state’s efforts to contain the coronavirus pandemic will be put to a new test this fall.
And while the governor estimated 95% of the state’s businesses are operating — albeit many in limited fashion — only about 85% of Connecticut’s workforce currently is employed.
“COVID-19 is impacting businesses all over the world, and we are committed to working with those in Connecticut to lessen the impact and keep their workers employed,” Lamont said. “This program has helped many companies over the years, and expanding it will allow these workers to keep their jobs, continue earning a paycheck, and help these Connecticut-based companies grow.”
Created in 1992, Shared Work creates an alternative for Connecticut businesses planning layoffs.
Rather than issuing pink slips, businesses can reduce workers hours between 10% and 60% for a six-month period. During this time, workers can supplement their lost wages by claiming state unemployment benefits.
Companies also can reapply to the labor department for an extension of the program after the six months have expired.
And since the pandemic began, the program also has offered a secondary benefit to participating companies.
The state’s unemployment compensation trust is fueled by assessments on Connecticut businesses. And whenever a firm lays off staff, participates in Shared Work, or otherwise causes its employees to draw unemployment, it’s assessment to replenish the trust is increased.
But shortly after the pandemic began in March, the federal government announced it would cover those added costs for businesses through Dec. 31.
Before the pandemic, Connecticut had 288 companies enrolled in the Shared Work program, protecting about 2,900 workers in total from layoffs, said Deputy Labor Commissioner Daryle Dudzinski.
Over the past six months the number of businesses involved has swelled fivefold to 1,340, he said, adding that 24,300 people still are employed due to Shared Work.
Once the economy improves, Dudzinski added, companies in the program can easily expand staffing hours without having to face hefty recruitment, hiring and training costs.
Lamont did not set specific goals for a further expansion of the Shared Work program’s participants, but the labor department will be adding interim staff and otherwise redirecting resources to accelerate processing of applications from interested companies.
The state also is directing interested businesses to an outreach website, and Lamont added he particularly is encouraging restaurant, hotel and other hospitality firms to review the program.
Though Shared Work is open to all business — except for seasonal operations that either close or dramatically reduce staff for significant portions of every year — it, historically, has been used by manufacturing firms like Pegasus, the governor said.
“The service sector has been hit so hard” by the pandemic, Lamont said, adding he hopes to see thousands of additional companies investigate the program if faced with the prospect of layoffs. “This is a type of way we can be partners.”