There's a Better Alternative to Layoffs and Furloughs

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More unemployment numbers came out this week, and at least 36.5 million Americans are out of full-time work because of the coronavirus outbreak. Thousands of businesses both large and small are scrambling to survive, and many of them are making decisions that try to save the company at the expense of its workers. Sending out red slips isn't the only way to conserve payroll, though.

It's called work sharing; you might also hear it called "shared work" or "short-time compensation," according to the National Employment Law Project: "Instead of laying off a portion of the workforce to cut costs, an employer may reduce the hours and wages of all employees or a particular group of workers." If you decide to participate in work sharing, you're eligible for prorated unemployment benefits. You get paid out of the same pot as regular unemployment insurance. Twenty-eight states offer this option, including Florida, California, Ohio, Texas, and Illinois.

In short, if your whole workplace decides to take a 20 percent cut in hours and wages in order to save everyone's jobs, each worker can get 20 percent of the unemployment they'd receive from the state. Individuals avert the trauma and negative economic effects of being laid off, and economies are more prepared to bounce back once the numbers line up again. It might even be cheaper for state governments overall. Even if your state doesn't offer the benefit, talk to your coworkers and your management about the option. It could be the best way out of this mess.