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PA Bulletin, Doc. No. 14-1515

NOTICES

Unemployment Compensation; Shared Work

[44 Pa.B. 4608]
[Saturday, July 19, 2014]

 Section 3304(a)(4)(E) of the Federal Unemployment Tax Act (FUTA) (26 U.S.C.A. § 3304(a)(4)(E)) and section 303(a)(5) of the Social Security Act (42 U.S.C.A. § 503(a)(5)) allow states to include a ''short-time compensation'' component in their unemployment compensation (UC) statutes. Short-time compensation is also known as ''shared work.'' The Commonwealth's shared-work provisions are in Article XIII of the Unemployment Compensation Law (law) (43 P. S. §§ 916.1—916.12), titled Shared-Work Program.

 Section 3306(v)(1)—(9) of FUTA (26 U.S.C.A. § 3306(v)(1)—(9)) requires a shared-work program to have certain enumerated characteristics. Under section 3306(v)(10) of FUTA, state law may not provide for additional features of a shared-work program unless they are ''determined to be appropriate for purposes of a short-time compensation program'' by the United States Department of Labor.

 Section 1307(b) of the law (43 P. S. § 916.7(b)) provides that UC paid to employees participating in a shared-work program is charged to the employer that requested the shared-work program. Charging shared-work benefits to the employer implementing the program is not one of the shared-work characteristics specified by FUTA. In the absence of section 1307(b) of the law, shared-work UC would be charged in the same way that regular UC is charged, that is, to each participating employee's base year employers.

 An employer requesting a shared-work program designates a percentage, called the ''reduction percentage,'' by which participating employees' normal hours of work are reduced under the program. The reduction percentage is a minimum of 20% and a maximum of 40%. Pursuant to section 1306(c)(1) and (2) of the law (43 P. S. § 916.6(c)(1) and (2)), if a participating employee's hours for a given week are reduced by more or less than the reduction percentage, his eligibility for benefits is determined by the eligibility criteria applicable to regular UC instead of the criteria applicable to shared work. This is another feature of a Pennsylvania shared-work program that is not among the shared-work characteristics enumerated in FUTA. In the absence of section 1306(c)(1) and (2) of the law, if a participating employee's hours are reduced by more or less than the reduction percentage his eligibility would continue to be determined under shared-work eligibility criteria, as long as the employee worked between 20% and 40% less than their normal work hours.

 The United States Department of Labor has advised the Department of Labor and Industry (Department) that the provisions in sections 1306(c)(1) and (2) and 1307(b) of the law are not appropriate for a short-time compensation program and disapproved those provisions under section 3306(v)(10) of FUTA.

 Section 1312 of the law (43 P. S. § 916.12) authorizes the Department to permanently suspend any provisions of Article XIII of the law that are disapproved by the United States Department of Labor. Pursuant to section 1312 of the law, notice is hereby given that sections 1306(c)(1) and (2) and 1307(b) of the law are permanently suspended. Section 1303(b)(3) of the law (43 P. S. § 916.3(b)(3)), which provides that the reduction percentage shall not change during the course of a shared-work program, is also permanently suspended to the extent necessary to give effect to the suspension of section 1306(c)(1) and (2) of the law. The suspended provisions shall not apply to shared-work plans approved by the Department on or after the date of publication of this notice in the Pennsylvania Bulletin.

JULIA K. HEARTHWAY, 
Secretary

[Pa.B. Doc. No. 14-1515. Filed for public inspection July 18, 2014, 9:00 a.m.]


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