Nevada’s unemployment office wants to prepare for the next economic downturn.
Senate Bill 308 would establish what’s called a work-sharing program within the state’s traditional unemployment system. Instead of completely laying off employees, a company could opt to spread the reduction across a group of several employees, theoretically saving the same amount of money but allowing employees to stay partially employed. Employees whose hours are reduced would be eligible for a prorated amount of their unemployment benefits to help makeup for that lost income.
Here’s a simplified example used by the Department of Employment, Training and Rehabilitation: A casino that is considering laying off two dealers might instead submit for approval a work-sharing program that temporarily reduces 10 employees’ hours by 20%. Each employee, who would have been eligible for approximately $400 per week in unemployment benefits if they had been totally laid off, would instead continue to earn 80% of their salary, keep their benefits, and be eligible to receive $80 per week in unemployment (or 20% of $400).
“We’re trying to prevent people from being totally laid off,” explained the bill sponsor state Sen. Marilyn Dondero Loop (D-Las Vegas).
According to Dondero Loop, 27 other states, including California, Arizona, Colorado and Oregon, have already established work-sharing programs within their traditional unemployment insurance programs.
DETR representatives emphasized participation in the work-share program would not be mandatory. Employers would have to opt in. Any employer could, so long as they had more than two employees who complete similar tasks.
State Sen. Keith Pickard (R-Henderson) lauded the concept but expressed concerns about DETR’s ability to successfully pull it off. He referenced previous statements made by DETR representatives about the state unemployment system relying on decades-old software so outdated that programmers don’t even train in them anymore.
“Nobody’s asked for the money to rebuild the system,” said Pickard. “So we end up expanding services when we haven’t even addressed the core mission of DETR and their resources and their ability to do it.”
He added, “I think we’re adding fuel to a raging dumpster fire.”
DETR Director Elisa Cafferata acknowledged the myriad issues her department has dealt with since the pandemic brought what’s been described as “beyond a tsunami” of benefits claims. The battered department has, in the past year, seen three different top administrators, backlogs, implementation delays, a worker shortage, and lawsuits.
Cafferata argued that expanding the traditional unemployment system to include a work-share program was not equivalent to having to launch something completely new like pandemic unemployment assistance, which provides assistance for workers who are not eligible for traditional unemployment.
“A lot of that had to do with the number of programs we were being asked to do in an extremely short timeframe,” says Cafferata. “The CARES Act passed and they wanted it as soon as possible. This is vastly different.”
She added that the department is currently in discussion with the governor’s office about “what the appropriate vehicle is” for possibly funding a completely new, modernized system. That’s been previously estimated at $40 million.
In the meantime, a much smaller amount — $1.5 million per year — is being built into the department’s next biennium budget to help with “some immediate stabilization and capacity building within the system.”
In an attempt to address concerns about diverting DETR’s attention from its existing issues, an approved amendment to SB308 delays the implementation by a year. Dondero Loop acknowledged the bill isn’t designed to address present-day issues but is instead focused on the future.
The U.S. Department of Labor last year also approved $100 million in grant money for states to help with the implementation of work-sharing programs, which are also called short-time compensation programs. DETR representatives said it’s “highly likely” Nevada would receive grant money.
Nevada reported the highest unemployment rate ever recorded by any state in modern history in April 2020 after the coronavirus pandemic led to mass business shutdowns. While many jobs have returned, the unemployment rate remains elevated. The state — and the Las Vegas metropolitan area — have remained near the top of national unemployment rankings.
Nevada’s most recently reported unemployment rate was 8.3%. Only four states — California, Connecticut, New York and Hawaii — reported a higher unemployment rate.