The economy is picking up, but in recent months some small businesses find cash flow shortages that have accumulated over the past year are catching up to them. One option, instead of laying off staff, is Service Canada's Work-Sharing Program.

The program intends to allow employers to keep workers in dire economic times, which will eliminate the need to retrain staff when the company is "back on its feet."

Criteria are in place to determine which businesses are eligible for the program. Companies must:

• be a year round business operating for at least two years;
• demonstrate that reduced hours are a necessity;
• show that lack of work is unexpected and not permanent;
• create a recovery plan showing how business will operate through duration of agreement and how it will be back to normal, once the economy recovers; and
• not be in the process of a labour dispute and have an agreement in place between union and employees (if a union is used).

Workers must be year round full-time or part-time 'core' staff who are needed in recovery, must be eligible to receive Employment Insurance and are not in a current labour dispute. A company must have at least two employees to be eligible for the program.

The duration of the program must be no less than six weeks and - until April 3, 2010 - cannot be any longer than 52 weeks. After that date, the program can only last 26 weeks, or 38 weeks under special circumstances reviewed by Service Canada.

Business interested in the program can view the applicant guide for employers online. Once an employer has decided to proceed with the program, they need to fill out an application form, found here. In addition to the application form, an Attachment A form must be completed, it is accessed here.

As well as the forms listed, recovery plan is required with the application process. An outline is provided here, with a link to a template in Word format available.

Once all application forms are completed; the package can be taken to a Service Canada Centre or mailed to Service Canada. Location can be searched here.

All agreements are to start on a Sunday and your package must be submitted at least 30 days before the start of an agreement. An assessment is performed by Service Canada, to determine if applications are to be approved.

Once in the program, employers are expected to complete a Utilization Report every week to show how many hours each employers in the program is working. The form can be downloaded here.

An example of the work share program was outlined by Stéphanie Lacroix, Service Canada. "In a 14 employee company, all workers in the same job description should be part of the work unit and reduce their hours. If there were only three workers doing essentially the same job (e.g. all office staff) then they could form a work unit. An agreement can be signed for a reduction in work anywhere from 20 per cent (one day in a typical five-day workweek) to 60 per cent (three days in a typical workweek).

"In this scenario the work unit could potentially work two days (60 per cent reduction) and collect EI for the three days he does not work (55 per cent of his salary to a max of $447 (gross) per week/ the number of days he is not working).

"If the employer gets weeks where there is more work, this additional work must be shared equally among the members of the work-unit. In any given week the employees could work less or more than the two days in the example above, as long as on average, over the life of the agreement the reduction in work comes close to the 60 per cent agreed upon."

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