The Employment Development Department (EDD) administers an Unemployment Insurance Work Sharing program available to employers who are facing an economic downturn, as a temporary alternative to traditional layoffs. The work-sharing program allows an employer to reduce an employee’s hours in lieu of layoff and allows the employee to receive partial unemployment benefits, even if the reduction of hours and compensation would not otherwise make them eligible for such benefits.
In 2020, responding to the economic uncertainty caused by the COVID-19 pandemic, and recognizing that the EDD program was not frequently used due to the burdensome application process, the Legislature enacted a temporary law to streamline the application process. The temporary law required the EDD to set up an online application portal and to automatically treat any work-sharing plan application submitted by eligible employers as approved for one year unless the employer requested a shorter plan. Originally, the streamlined process was limited to applications submitted between September 15, 2020, and September 1, 2023, and the statute itself would expire on January 1, 2024.
Assembly Bill 1854 (AB 1854) removes the time limitation and sunset date, meaning the new streamlined process is now operative indefinitely. AB 1854 also requires the EDD to accept electronic signatures on all work-sharing plan application documents.
(AB 1854 amends Section 1279.7 of the Unemployment Insurance Code.)