Coronavirus: 500 city of Lansing workers move to 4-day work week to save money

Lansing State Journal

LANSING — About 500 Lansing workers will switch to four-day work weeks with Fridays off, saving the city an estimated $1.5 million as it struggles with the financial fallout of the COVID-19 pandemic.

Elected officials, police employees, fire employees and employees of District Court 54A will not participate in the work share, which will begin June 1 and continue until July 25, according to a statement released by the city.

Although pay from the city will be cut by 20%, employees will receive additional pay through Michigan's Unemployment Insurance Agency's work share program.

“Moving to a four-day work week and participating in the work share program is another step that the city must take to address budgetary challenges and economic uncertainty that we are all facing due to the COVID-19 pandemic,” Lansing Mayor Andy Schor said in a statement. "We know that services may be delayed, but this will ensure that these services can continue to be provided.”

Based on hours worked, participating employees will receive a portion of state unemployment benefits, which are $362 for a 40-hour work week.

Plus, through July 31, employees participating in the work share are eligible to receive $600 a week in unemployment benefits from the federal government through the Coronavirus Aid, Relief, and Economic Security Act. Employees get the full $600 a week in federal benefits even if hours are only reduced by one day a week.

As a result of the work share, city offices will be closed to the public on Fridays from June 1 through July 30, although essential operations such as police, fire and ambulance services will continue.

Participating city workers will be enrolled automatically in Michigan's unemployment program and will continue to receive city benefits such as health care, according to the release.

Michigan's work share program is designed to discourage cash-strapped businesses from laying off employees. Gov. Gretchen Whitmer signed an executive order in April that expanded the program, allowing participating employers to reduce payroll costs by 10% to 60%, which is more flexible than the normal range of 15% to 45%.

As businesses in the region lay off and furlough staff, Lansing's treasurer has predicted the city could lose $7.8 million next fiscal year in income tax revenue alone. The city stands to lose millions more as it takes in less money from fines and fees and sees reduced funding from the state.

Because of the economic effects of coronavirus-related restrictions, City Council cut nearly $13 million in spending and reserve funds from Lansing's budget for the fiscal year that begins July 1.

Additionally, Lansing's mayor has ordered a freeze on non-essential spending and hiring and has offered voluntary furloughs through July 31 to non-bargaining employees plus members of the United Auto Workers, Teamsters 214 and Teamsters 243 unions.

Contact reporter Sarah Lehr at slehr@lsj.com. Follow her on Twitter @SarahGLehr.