The recession is forcing a number of businesses to make layoffs to cope with a downturn in activity.
The state Department of Labor is urging companies facing tough times to consider an alternative that combines reduced work hours for employees with partial unemployment benefits to help cover the pay gap.
M. Patricia Smith, commissioner of the state Labor Department, visited the region on Thursday to draw attention to the "shared work" program. An increasing number of employers are enrolling in it, but Smith said she still feels too few know about shared work amid rising unemployment.
"Shared work is one of the best programs that struggling businesses can utilize to stay afloat in difficult times," Smith said. "It's one of the best-kept secrets, and we want to change that."
In Western New York, 88 businesses are using the program, covering 4,371 employees.
Statewide, participation grew from 291 employers in 2007 to 462 in 2008. So far this year, 208 employers have signed up.
Employers with five or more full-time employees are eligible to sign up. Rather than laying off workers during down periods, an employer can reduce the wages and hours for all or a selected group of employees. The affected workers receive partial unemployment compensation benefits to make up for part of their lost wages.
As a condition of participating, employees' health insurance, retirement pay, vacation pay and other fringe benefits are not reduced, Smith said. Some unionized companies participate, but the union has to consent to it, she said.
Smith said the program benefits employers and employees alike during difficult times, when layoffs might be its last resort.
"Workers keep their paychecks and benefits at a reduced schedule," she said. "Businesses retain the workers they've hired and trained, the ones who know the company inside out."
Smith talked up the program during a visit to New Buffalo Shirt Factory, a Clarence business that has used the program at times over the past three years to fill seasonal gaps in its business.
About 100 of New Buffalo's 160 workers are covered by the program, said Greg Wall, president and chief operating officer. The company prints images on apparel for customers including touring bands such as Metallica, AC/DC and the Rolling Stones, as well as Walt Disney Co., World Wrestling Entertainment and Universal Studios.
While some businesses enroll in shared work due to an unexpected downturn, New Buffalo has integrated it into its business cycle. Summer is its peak time, when it supplies shirts to 70 percent of the major bands touring the United States. A slack period starts in December and extends into the first quarter, Wall said.
January was its slowest month ever for orders, Wall said. But its efforts to develop new lines of business and markets bore fruit this month, causing a dramatic upswing in activity. Because of shared work, New Buffalo was ready to handle the increase since its work force was intact.
New Buffalo employees said they like the program since it keeps them on the job, even at reduced pay for a time, when they would otherwise be laid off.
Under an approved shared work plan, employees may collect partial unemployment benefits for up to 20 weeks. Under the current federal extended benefits plan, the 20 weeks of shared work benefits can be extended to 40 weeks.
Employers interested in shared work can call (518) 457-5807, or visit www.labor.state.ny.us. The Labor Department also has scheduled a seminar from noon to 2 p.m. on Feb. 24, at Classics V in Amherst, to discuss shared work and other business services. For details, call 851-2750.