THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BRADFORD, REICHLEY, BELFANTI, GERGELY, BURNS, BROWN, COHEN, DePASQUALE, DONATUCCI, FRANKEL, FREEMAN, GALLOWAY, GIBBONS, GOODMAN, HARKINS, KORTZ, MATZIE, McGEEHAN, MELIO, MURPHY, READSHAW, K. SMITH, SWANGER, R. TAYLOR, YOUNGBLOOD, MANN AND SIPTROTH, JANUARY 25, 2010

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, ARPIL 19, 2010   

AN ACT

Amending the act of December 5, 1936 (2nd Sp.Sess., 1937

P.L.2897, No.1), entitled "An act establishing a system of

unemployment compensation to be administered by the

Department of Labor and Industry and its existing and newly

created agencies with personnel (with certain exceptions)

selected on a civil service basis; requiring employers to

keep records and make reports, and certain employers to pay

contributions based on payrolls to provide moneys for the

payment of compensation to certain unemployed persons;

providing procedure and administrative details for the

determination, payment and collection of such contributions

and the payment of such compensation; providing for

cooperation with the Federal Government and its agencies;

creating certain special funds in the custody of the State

Treasurer; and prescribing penalties," further providing for

shared work program.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of December 5, 1936 (2nd Sp.Sess., 1937

P.L.2897, No.1), known as the Unemployment Compensation Law, is

amended by adding an article to read:

ARTICLE XIII

SHARED WORK PROGRAM

Section 1301.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Affected unit."  A department, shift or other organizational

unit of two or more employees that is designated by an employer

to participate in a shared-work plan.

"Approved shared-work plan."  An employer's shared-work plan

which meets the requirements of section 1303 and which the

department approves in writing.

"Fringe benefit."  Health insurance, a retirement benefit

received under a pension plan, a paid vacation day, a paid

holiday, sick leave and any other similar employee benefit

provided by an employer.

"Participating employee."  An employee in the affected unit

whose hours of work are reduced by the reduction percentage

under the shared-work plan.

"Participating employer."  An employer who has a shared-work

plan in effect.

"Reduction percentage."  The percentage by which each

participating employee's normal weekly hours of work are reduced

under a shared-work plan in accordance with section 1303(b).

"Shared-work plan."  A plan for reducing unemployment under

which participating employees of an affected unit share the work

remaining after reduction in their normal weekly hours of work.

Section 1302.  Application to approve plan.

(a)  Requirements.--An employer that meets all of the

following requirements may apply to the department for approval

of a shared-work plan:

(1)  The employer has filed all quarterly reports and

other reports required under this act and has paid all

contribution, reimbursement, interest and penalty due through

the date of the employer's application.

(2)  If the employer is contributory, the employer's

reserve account balance as of the most recent computation

date preceding the date of the employer's application is a

positive number.

(3)  The employer has paid wages for the 12 consecutive

calendar quarters preceding the date of the employer's

application.

(b)  Application.--An application under this section shall be

made in the manner prescribed by the department and contain all

information required by the department, including the following:

(1)  The employer's assurance that it will provide

reports to the department relating to the operation of its

shared-work plan at the times and in the manner prescribed by

the department and containing all information required by the

department, including the number of hours worked each week by

participating employees.

(2)  The employer's assurance that it will not hire new

employees in, or transfer employees to, the affected unit

during the effective period of the shared-work plan.

(3)  The employer's assurance that it will not lay off

participating employees during the effective period of the

shared-work plan, or reduce participating employees' hours of

work by more than the reduction percentage during the

effective period of the shared-work plan, except in cases of

illness, holidays, designated vacation periods, equipment

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maintenance or similar circumstances.

(4)  A list of the week or weeks within the requested

effective period of the plan during which participating

employees are anticipated to work fewer hours than the number

of hours determined under section 1303(a)(5) due to

circumstances included in paragraph (3).

(5)  The employer's certification that the implementation

of a shared-work plan is in lieu of temporary layoffs that

would affect at least 10% of the employees in the affected

unit and would result in an equivalent reduction in work

hours.

(6)  The employer's assurance that it will abide by all

terms and conditions of this article.

(c)  Multiple plans.--An employer may apply to the department

for approval of more than one shared-work plan.

Section 1303.  Plan requirements.

(a)  General rule.--The department may approve a shared-work

plan only if the plan meets all of the following requirements:

(1)  The shared-work plan applies to one affected unit.

(2)  All employees in the affected unit are participating

employees, except that the following employees may not be

participating employees:

(i)  An employee who has been employed in the

affected unit for less than three months prior to the

date the employer applies for approval of the shared-work

plan.

(ii)  An employee whose hours of work per week

determined under paragraph (5) is 40 or more hours.

(3)  There are no fewer than two participating employees,

determined without regard to corporate officers.

(4)  The participating employees are identified by name

and Social Security number.

(5)  The number of hours a participating employee will

work each week during the effective period of the plan is

determined by the following formula:

employee's normal weekly hours of 

work x (100% - reduction percentage)

(6)  As a result of a decrease in the number of hours

worked by each participating employee, there is a

corresponding reduction in wages.

(7)  If any participating employee is covered by a

collective bargaining agreement, the plan is approved in

writing by the collective bargaining representative.

(8)  The plan does not affect the fringe benefits of any

participating employee not covered by a collective bargaining

agreement.

(9)  The effective period of the plan is not more than 52

consecutive weeks.

(10)  The effective period of the plan combined with

effective periods of the participating employer's prior plans

does not equal more than 104 weeks out of a 156-week period.

(11)  The reduction percentage satisfies the requirements

of subsection (b).

(b)  Reduction percentage.--The reduction percentage under an

approved shared-work plan shall meet all of the following

requirements:

(1)  The reduction percentage shall be no less than 20%

and no more than 40%.

(2)  The reduction percentage shall be the same for all

participating employees.

(3)  The reduction percentage shall not change during the

period of the shared-work plan unless the plan is modified in

accordance with section 1308.

Section 1304.  Approval or disapproval of shared-work plan.

The department shall approve or disapprove a shared-work plan

no later than 15 days after the date the employer's shared-work

plan application that meets the requirements of section 1302(b)

is received by the department. The department's decision shall

be made in writing and, if the shared-work plan is disapproved,

shall include the reasons for the disapproval.

Section 1305.  Effective period of plan.

(a)  Number of weeks.--A shared-work plan is effective for

the number of consecutive weeks indicated in the employer's

application, or a lesser number of weeks as approved by the

department, unless sooner terminated in accordance with section

1308.

(b)  Start date.--The effective period of the shared-work

plan shall begin with the first calendar week following the date

on which the department approves the plan.

Section 1306.  Criteria for compensation.

(a)  General rule.--Compensation shall be payable to a

participating employee for a week within the effective period of

an approved shared-work plan during which the employee works the

number of hours determined under section 1303(a)(5) for the

participating employer on the same terms, in the same amount and

subject to the same conditions that would apply to the

participating employee without regard to this article, except as

follows:

(1)  A participating employee shall not be required to be

unemployed within the meaning of section 4(u) or file claims

for compensation under section 401(c).

(2)  Section 404(d)(1) shall be applicable as if it

provided as follows: A participating employee shall be paid

compensation in an amount equal to the product of his weekly

benefit rate and the reduction percentage, rounded to the

next lower whole dollar amount.

(3)  The department shall not deny compensation to a

participating employee for any week during the effective

period of the shared-work plan by reason of the application

of any provision of this act relating to active search for

work or refusal to apply for or accept work other than work

offered by the participating employer.

(4)  A participating employee satisfies the requirements

of section 401(d)(1) if the employee is able to work and is

available for the employee's normal weekly hours of work with

the participating employer.

(b)  Equivalent remuneration.--For purposes of subsection

(a), if a participating employee works fewer hours than the

number of hours determined under section 1303(a)(5) for the

participating employer during a week within the effective period

of the approved shared-work plan, but receives remuneration as

if the employee had worked the number of hours determined under

section 1303(a)(5), the employee will be deemed to have worked

the number of hours determined under section 1303(a)(5) during

that week.

(c)  Inapplicability of article.--A participating employee's

eligibility for compensation for a week within the effective

period of an approved shared-work plan shall be determined

without regard to this article under any of the following

circumstances:

(1)  The employee works fewer hours than the number of

hours determined under section 1303(a)(5) for the

participating employer during the week and subsection (b)

does not apply.

(2)  The employee works more hours than the number of

hours determined under section 1303(a)(5) for the

participating employer during the week.

(3)  The employee receives remuneration for the week from

the participating employer for hours in excess of the number

of hours determined under section 1303(a)(5).

Section 1307.  Participating employer responsibilities.

(a)  Filing claims.--The department shall establish a

schedule of consecutive two-week periods within the effective

period of the shared work plan. The department may, as

necessary, include one-week periods in the schedule and revise

the schedule. At the end of each scheduled period, the

participating employer shall file claims for compensation for

the week or weeks within the period on behalf of the

participating employees. The claims shall be filed no later than

the last day of the week immediately following the period,

unless an extension of time is granted by the department for

good cause. The claims shall be filed in the manner prescribed

by the department and shall contain all information required by

the department to determine the eligibility of the participating

employees for compensation.

(b)  Benefit charges.--Notwithstanding any other provision of

this act, compensation paid to participating employees for weeks

within the effective period of an approved shared-work plan will

be charged to the participating employer.

Section 1308.  Modification of plan.

An employer may apply to the department for approval to

modify a shared-work plan to meet changed conditions. The

department shall reevaluate the plan and may approve the

modified plan if it meets the requirements for approval under

section 1304. If the modifications cause the shared-work plan to

fail to meet the requirements for approval, the department shall

disapprove the proposed modifications.

Section 1309.  Termination of plan.

(a)  General rule.--The secretary may terminate a shared-work

plan for good cause.

(b)  Good cause.--For purposes of subsection (a), good cause

includes any of the following:

(1)  The plan is not being executed according to its

approved terms and conditions.

(2)  The participating employer fails to comply with the

assurances given in the plan.

(3)  The participating employer or a participating

employee violates any criteria on which approval of the plan

was based.

(c)  Termination by employer.--The employer may terminate a

shared-work plan by written notice to the department.

Section 1310.  Department discretion.

The decision to approve or disapprove a shared-work plan, to

approve or disapprove a modification of a shared-work plan or to

terminate a shared-work plan will be made within the

department's discretion. Such decisions are not subject to the

appeal provisions of Article V.

Section 1311.  Publication of notice.

The department shall transmit to the Legislative Reference

Bureau for publication in the Pennsylvania Bulletin notice that

the provisions of this article have been approved by the

Department of Labor as required under section 3304(a)(4)(E) of

the Federal Unemployment Tax Act (Public Law 86-778, 26 U.S.C. §

3304(a)(4)(E)) and section 303(a)(5) of the Social Security Act

(49 Stat. 620, 42 U.S.C. § 503(a)(5)).

Section 1312.  Report.

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In addition to other reports by the department and the State

Unemployment Compensation Advisory Council under section 204.1,

an annual report shall be submitted to the Governor, the

chairman and minority chairman of the Labor and Industry

Committee of the Senate and the chairman and minority chairman

of the Labor Relations Committee of the House of Representatives

regarding shared work plans under this article. The report shall

include the number of approved shared work plans, the number of

participating employers, the number of participating employees,

the amount of compensation paid to participating employees and

any other information that the council or department determines

is relevant to assess the impact of this article on the

Unemployment Compensation Fund. The first report shall be

submitted on or before the first day of March following the

first complete calendar year during which this article is in

effect, and subsequent reports shall be submitted on or before

the first day of March of each year thereafter.

Section 1312 1313.  Severability.

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Notwithstanding any other section of this act, if any

provision or provisions of this article cause the Department of

Labor to withhold approval of this article as required under

section 3304(a)(4)(E)) of the Federal Unemployment Tax Act (26

U.S.C. 3304(a)(4)(E) and section 303(a)(5)) of the Social

Security Act, (42 U.S.C. § 503(a)(5)), the department is

authorized to permanently suspend the provision or provisions.

Section 1313.  Expiration.

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This article shall expire five years from its effective date.

Section 2.  This act shall take effect when notice is

published in the Pennsylvania Bulletin under section 1311 of the

act, or July 1, 2010, whichever is later.