Connecticut Shared Work Program: Eligibility and Employer Rules

The Connecticut Shared Work Program lets an employer cut employee hours instead of laying workers off, and the state makes up part of the lost pay through partial unemployment benefits.¹ Workers keep their jobs, their health coverage, and their retirement contributions. Employers keep trained staff they would otherwise have to rehire and retrain when business picks up. The trade-off is a set of rules that both sides have to follow carefully, because a plan that drifts from what was approved can be terminated.

How the Benefit Payment Works

An employer submits a plan to the Connecticut Department of Labor (CTDOL) proposing reduced hours for a defined group of employees. Once approved, those employees work the shorter schedule and receive a portion of their weekly unemployment benefit on top of their reduced paycheck. The portion matches the hour cut. If your hours drop 30%, you get 30% of the weekly unemployment amount you would have received if fully unemployed.

Each employee’s normal weekly hours must be reduced by at least 10% and no more than 60%, with a matching reduction in wages.² The cut has to be uniform across the affected group. In any week where an employee works more than the reduced schedule allows, that person cannot collect shared work benefits for the week unless the employer formally amends the plan.

One thing worth noting up front: shared work benefits still count against your maximum unemployment benefits for the year.² If you spend months on shared work and then get laid off, you’ll have fewer weeks of regular benefits left.

Employer Eligibility and Application

Any Connecticut employer whose unemployment insurance taxes or reimbursement payments are current can apply.³ The affected group has to include at least two permanent employees. Temporary and seasonal workers are excluded, and the program cannot be used to subsidize a seasonal employer during its off-season.

The application is a written plan describing who is affected, how many hours will be cut, and how long the arrangement is expected to last. Employers submit it by email to DOL.SharedWork@ct.gov, by fax, or by mail to the Shared Work Unit in Wethersfield. The CTDOL has 30 days from receipt to approve or deny in writing.⁴

Union Approval and Employee Comment

If the affected employees are represented by a union, the collective bargaining representative must approve the plan in writing before the CTDOL will consider it. In a non-union workplace, the employer has to give every affected employee a copy of the proposed plan (or a summary) and allow at least seven days for review and comment. Any comments received are attached to the application.³

Health and Retirement Benefits Must Continue

Federal law requires the employer to certify that health benefits and retirement contributions will continue on the same terms as if the employee’s hours had not been reduced. That covers both defined benefit pensions and defined contribution plans like 401(k)s. Cutting benefits alongside hours is not permitted under the program.

Which Employees Can Participate

Participants must be permanent full-time or part-time workers. Temporary and seasonal employees are out.³ Beyond that, each employee has to meet Connecticut’s standard monetary eligibility for unemployment insurance, which generally means enough earnings during the base period (the first four of the five most recently completed calendar quarters).⁵

No Job Search Required

Employees collecting shared work benefits are exempt from the job-search requirements that apply to regular unemployment claimants.² What they do have to do is stay available for their full normal schedule with the participating employer, and they cannot turn down hours that fall within the reduced arrangement.

Outside Income

Wages from a different employer are disregarded when the shared work benefit is calculated.² Taking a second job does not reduce your shared work payments. You should still report outside employment when filing weekly claims, since general unemployment insurance rules require accurate reporting and misrepresentation carries penalties.

Taxes

Shared work benefits are unemployment compensation, and unemployment compensation is fully taxable by both the IRS and Connecticut.⁶ Nothing is withheld automatically. To have federal income tax taken out, submit IRS Form W-4V to the CTDOL. Otherwise you may owe a meaningful amount at filing time.

Two Traps for Employers

Salaried Exempt Employees

Reducing hours for salaried workers classified as exempt under the Fair Labor Standards Act puts the exemption at risk. The FLSA requires exempt employees to receive their full predetermined salary for any week in which they perform any work, and deductions for partial-week absences driven by the employer’s operating decisions are generally prohibited.⁷

An employer can prospectively reduce a predetermined salary for a bona fide business or economic downturn, as long as the reduction is set in advance and not calculated week by week based on hours worked. If the reduced salary drops below the federal salary threshold for exemption, though, the employee loses exempt status and becomes entitled to overtime. Employers considering shared work for salaried exempt staff should get employment counsel involved before implementing.

FMLA Hours

An employee qualifies for Family and Medical Leave Act leave only after logging at least 1,250 hours of service with the employer during the preceding 12 months.⁸ Sustained shared work participation can push someone under that line. A full-time employee normally logs about 2,080 hours a year; a 40% reduction drops that to roughly 1,248, which falls short. Workers with ongoing medical or caregiving needs should know that extended time on shared work could put FMLA eligibility at risk.

Employer Obligations While the Plan Runs

Once a plan is approved, the employer submits weekly certifications to the CTDOL confirming that hour reductions match what was approved.¹ Discrepancies between the certifications and what actually happens can trigger audits.

Connecticut employers must keep true and accurate employment records at the place of employment for at least three years.⁹ For shared work, that includes schedules, payroll, and documentation of benefit contributions throughout the plan and afterward.

All other labor laws still apply. Connecticut’s minimum wage is $16.94 per hour as of January 1, 2026.¹⁰ Anti-discrimination law applies too; hour reductions must be applied fairly across the affected group, not concentrated on protected classes.

Effect on the Employer’s UI Tax Rate

Shared work benefits are charged to the employer’s unemployment insurance experience account the same way regular benefits are. Using the program increases the benefits charged against your account, which can push future tax rates higher.¹¹ Before applying, compare that projected impact against what layoffs would cost in severance, recruitment, and retraining.

Ending, Modifying, or Appealing

An employer can withdraw from the program voluntarily once conditions improve by notifying the CTDOL of the reason and effective date. Partial recovery can be handled with a modification, such as changing the percentage of the hour reduction.

The CTDOL can terminate a plan for non-compliance. Reducing hours outside the approved range, dropping health or retirement benefits, or filing inaccurate weekly certifications are all grounds for removal. Willful misrepresentation of hardship, or manipulating schedules to draw benefits improperly, can result in disqualification from future participation.

If an employee is terminated or quits during a plan, that person must file a separate claim for regular unemployment benefits, which carry different rules including active job-search requirements.

Anyone who disagrees with a CTDOL shared work determination has 21 calendar days from the mailing date to file an appeal.¹² Late appeals are heard only if you show good cause for missing the deadline. The first step is a hearing before an unemployment appeals referee. Either party can take an unfavorable referee decision to the Board of Review.¹³

1
Connecticut Department of Labor. Shared Work
2
Connecticut eRegulations. Section 31-250-11 – Eligibility for Shared Work Compensation
3
Connecticut Department of Labor. Shared Work Program Employer FAQs
4
Connecticut Department of Labor. New to Shared Work
5
Justia Law. Connecticut Code 31-230 – Benefit Year, Base Period and Alternative Base Period
6
Connecticut Department of Labor. Taxes
7
U.S. Department of Labor. Fact Sheet 70 – Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues
8
U.S. Department of Labor. Fact Sheet 28 – The Family and Medical Leave Act
9
Connecticut eRegulations. Section 31-62-E14 – Records
10
Connecticut Department of Labor. Minimum Wage Information
11
Connecticut Department of Labor. Information on Unemployment Tax Rate for Calendar Year 2026
12
Connecticut Department of Labor. How Do I Appeal an Unemployment Benefits Decision
13
Connecticut Department of Labor. What Does the Board of Review Do With My Appeal