U.S. Senator Sherrod Brown Wednesday said he is co-sponsoring legislation that would allow employers who reduce their payrolls to do so through "work-sharing" rather than mass layoffs.
Mr. Brown, a Democrat, told reporters Wednesday that the Layoff Prevention Act of 2011 would allow employers to spread the impact of a business downturn to all employees, and that unemployment insurance compensation would make up for part of their lost wages.
He said the Layoff Prevention Act is a partial solution to the sluggish rebound of the economy following the recession. Mr. Brown said 23 states utilize so-called short-term compensation, but Ohio is not one.
The law would allow Gov. John Kasich to apply to the U.S. Department of Labor for participation rather than requiring immediate action by the legislature.
Zach Schiller, research director of the pro-union think tank Policy Matters Ohio, said a company, rather than lay off one-fifth of its work force, could choose to reduce everyone's hours by 20 percent.
An employee paid $750 a week, for example, would be reduced to $600 a week. In Ohio, an employee would get half of his lost income -- in this case $75 -- through unemployment compensation.
He said the law was introduced in the state General Assembly last year but died because of questions about the cost to the state and the belief that the economy was rebounding.
"For workers, short-time compensation means a paycheck instead of depending solely on unemployment insurance; for businesses it means the retention of skilled and loyal workers -- avoiding retraining and rehiring efforts," Mr. Brown said.
Rob Nichols, a spokesman for Mr. Kasich, said the administration would review the bill.
Mr. Brown said every dollar spent on short-term compensation would return $1.26 to the gross domestic product.
Scott Blue, plant manager of Kenworth Truck Co. in Chillicothe, applauded the proposed legislation. He said Kenworth was able to retain orders at sister plants in states with the short-term compensation policy while competitors had to forgo orders because they had made layoff decisions.