Currently, employers who are facing an economic downturn have the option to participate in the Employment Development Department’s (EDD) Unemployment Insurance Work Sharing program as a temporary alternative to layoffs. The work-sharing program allows an employer to reduce an employee’s hours in lieu of layoff and allow the employee to receive partial unemployment benefits, even if the reduction of hours and compensation would not otherwise make them eligible for such benefits. However, this EDD program is not frequently used by employers because the application process can be administratively burdensome by requiring the submission of a detailed written plan to the EDD that can then take several days to be approved.
In response to the economic uncertainty following the COVID-19 pandemic, the Legislature enacted AB 1731 to minimize the risk of widespread layoffs and increase the use of this work-sharing program by streamlining the application process. AB 1731 automatically deems any work-sharing plan application submitted by eligible employers between September 15, 2020, and September 1, 2023, approved for one year unless the employer requested a shorter plan.
As an urgency bill, AB 1731 became effective immediately upon Governor Newsom signing it into law on September 28, 2020.
(AB 1731 amends Section 1279.5 of and adds Sections 1279.6 and 1279.7 to the Unemployment Insurance Code.)