Carol J. Ott in Building Operations on April 30, 2020
Habitat spoke recently with Phyllis Weisberg, a partner at the law firm Armstrong Teasdale, about the Shared Work Program, a tool co-op and condo boards can use to reduce their payrolls without laying off employees during the coronavirus pandemic.
First off, can you explain what the Shared Work Program is?
Weisberg: It’s a program that New York State's Department of Labor has had for a number of years. It allows for temporary reduction in hours for employees in seasonal businesses so they don’t get laid off. An employer can reduce the hours of an employee anywhere from 20 to 60% of their regular hours for a period of time. And their reduction in pay is in part compensated by their eligibility for unemployment benefits.
So, for co-op and condo buildings, this would be a way to reduce operating expenses?
Weisberg: It was not a device that was readily available to buildings that have union employees. But on April 11th the Realty Advisory Board and Local 32BJ (of the Service Employees International Union), which represents building employees, entered into what they call a memorandum of agreement, authorizing the use of this program to help employers save money – and to help employees keep their jobs. This was an outgrowth of what Congress did in the CARES Act.
Let's say I'm on the board of a co-op with 10 staff members. If I were signed on to the Shared Work Program for May and June, what would my savings be?
Weisberg: Figure $500 a week per employee. Over eight weeks, you would save $40,000.
That’s significant. And how can I make sure that the staff, who almost all buildings really value, will not actually be financially hurt?
Weisberg: Assuming their hours are cut by 50%, they will be entitled to 50% of the unemployment benefit they would get if they had been fully unemployed. During this period, by the way, the employer has to continue paying all the health and fringe benefits that are required under the union contract. Congress made it much sweeter because under the CARES Act, there's a $600 bonus payment available every week until July 31st, so that employees not only would be eligible for their proportionate share of unemployment, but they would also get a $600 payment. And, in most cases, that means employees actually make more than they would have had they been working a 40-hour week.
I've heard reports that in many buildings, 50% of the apartments are empty. Maybe those boards could justify cutting staff?
Weisberg: In some buildings we've seen that 75% of the occupants are gone. There's no construction going on, there are no alterations going on. So, there really is less of a need for staff. Other boards say, "Well wait a minute, we have to do a lot more cleaning work. We really need our staff, and we need the cushion of extra staff in case someone gets sick." So, it's a balancing act that each board has to look at.
What has to happen if a board decides to participate in the Shared Work Program?
Weisberg: The employer has to file an application online with the Department of Labor. It's a two page application, very simple, and there is help readily available on the phone. Boards also have to file a list of the employees who will be involved, and you can break your staff into units. For example, maybe it's only your door staff where you're overloaded. You can keep your porters and handymen, and only have it apply to your door staff. You also have to provide a copy to the union, let them know what you're doing.
So, if you're governing a building where a large percentage of your residents have left and you have a lot of staff, this is a relatively quick and painless way to save money in the next eight weeks.
Thank you. Much appreciated.
Weisberg: My pleasure.
Engage, enrage, ask questions and give answers with your community of board members. Submit your questions and comments here!
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
A free digital resource for co-op/condo board directors. Published twice a month. Read now on all digital devices.