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Tennessee Enacts Shared Work Program

07/07/22

Author: ADP Admin/Tuesday, July 5, 2022/Categories: Compliance Corner , State Compliance Update, Tennessee

Tennessee has enacted legislation (Senate Bill 958) that allows employers to create a voluntary shared work program. Senate Bill 958 took effect on May 27, 2022.

The Details:

Tennessee has established a shared work program that allows employers to reduce and evenly redistribute work hours among a group of employees to avoid layoffs.

Shared Work Plan Requirements:

To participate in the shared work program, an employer must submit a written plan to the state administrator. To be approved, the plan must:

  • Provide an estimate of how many layoffs would occur without the program;
  • Certify that the total reduction in work hours would have impacted at least 10% of the employees in the affected group;
  • Apply to at least 10% of the employees in the affected group;
  • Ensure that the affected group of employees was not reduced by temporary layoffs of over 10% of the workers in the past four months;
  • Reduce the usual weekly hours for affected employees by at least 10% and up to 40%;
  • Continue health, retirement, and fringe benefits for the affected employees as though their work was not reduced; and
  • Not act as a subsidy for part-time, intermittent, or seasonal employees.

Employee Eligibility and Benefits:

An employee is eligible for shared work benefits if they are a member of an affected group and able and available to work during the normal work week.

Eligible employees are entitled to replace a portion of their lost wages by collecting a portion of their unemployment benefits (their regular weekly unemployment benefit multiplied by the percentage of the reduction in their usual weekly working hours) for up to 25 weeks.

Note: Under the law, additional rules exist if an employee works for a shared work employer and another employer.

Next Steps:

Tennessee employers should consult legal counsel to discuss the impact of Senate Bill 958 on their staffing policies and practices.

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