Reed Seeks to Extend Cost-Effective, Job-Saving Layoff Prevention Act

Press Release

In an effort to ensure employers can maintain a skilled workforce, and help workers keep their jobs during a temporary business decline, U.S. Senator Jack Reed introduced the Layoff Prevention Extension Act of 2015, a bill to extend the financing and grant provisions for the successful "work sharing" law Reed authored as part of the Middle Class Tax Relief and Job Creation Act of 2012. As a result of Senator Reed's efforts, an estimated $500 million in federal funding was made available to help states adopt or expand a short-term compensation program alternative to layoffs.

The concept of "work sharing" is simple: it helps people who are currently employed, but in danger of being laid off, to keep their jobs during a business slow down or market shift. By giving struggling companies the flexibility to reduce hours instead of their workforce, work sharing programs prevent layoffs and help employers save money on rehiring costs. Employees who participate in work sharing keep their jobs -- along with health and retirement benefits -- and receive a portion of unemployment insurance benefits to make up for lost wages when their hours are reduced.

"It's often said that the best job program is a job. That's what work sharing is all about. It is a proven, cost-effective program that saves jobs. It benefits taxpayers, businesses, and workers. Extending this program for another two years would allow for more communities to benefit and save money while helping more workers earn a steady paycheck, and allowing companies to save when they're forced to temporarily scale back. The program has been successful in red states and blue states, and as more people become aware of the benefits, more states are implementing and effectively promoting work share programs," said Reed. "Extending this successful work sharing program for another two years is a smart investment in averting future layoffs and blunting economic downturns."

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