The U.S. Department of Labor recently announced a grant of more than $1.2 million to assist some 246 Rhode Island workers who were displaced by layoffs at the Brooks Eckerd corporate offices in Warwick. The layoffs are due to acquisition of Brooks Eckerd by Rite Aid.
The total grant is $1,224,099, of which $685,497 is to be released immediately under the National Emergency Grant program.
“This $1.2 million grant will provide these Rhode Island workers with skills training and other employment services to help them find and succeed in new jobs,” said U.S. Secretary of Labor Elaine L. Chao.
The grant is formally awarded to the Rhode Island Department of Labor and Training to provide workers with a full array of employment services, including assessment, career advice, occupational skills training and basic skills development.
On June 5, 2007 Brooks Eckerd announced layoffs beginning in August 2007. The layoffs are expected to continue through May 2008. The change comes as the new ownership changes Eckerd Pharmacies over to the Rite-Aid brand.
Brooks Eckerd Pharmacy was created when Jean Coutu purchased the Eckerd Drugstore chain from J.C. Penney and merged it with Brooks Pharmacy, a regional chain. The company was a unit of the Quebec-based Jean Coutu Group, however, the Brooks Eckerd corporate headquarters was located in Warwick, Rhode Island.
On August 23, 2006, the Wall Street Journal announced that Rite Aid would buy Brooks Eckerd for $3.4 billion. The deal closed on June 4, 2007. One day later, the company announced plans to relocate the corporate office in the merger.
Rite Aid Corporation is one of the nation’s leading drugstore chains. With the acquisition of Brooks Eckerd, the company has annual revenues of more than $27 billion. Rite Aid now has more than 5,000 stores in 31 states and the District of Columbia, with a strong presence on both the East and West coasts. The stores employ about 116,000 people. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD.
According to company sources, all of the acquired Brooks Eckerd stores will be renamed Rite Aid and carry Rite Aid products and services. Integration of the more than 1,850 acquired stores is expected to be completed over 16 months.
According to the U.S. Department of Labor, National Emergency Grants (NEG) are discretionary awards by the Secretary of Labor. The grants temporarily expand service capacity at the state and local levels through time-limited funding assistance in response to “significant dislocation events.” When a layoff, plant closing or other event creates a need beyond what the state can reasonably be expected to meet, the state may apply for an Emergency Grant. In order for a state to qualify, any discretionary funds available at the state level must be included in the state’s resources.
Grants are given for different purposes. Disaster grants benefit areas afflicted by floods, wildfires, blizzards, hurricanes, earthquakes and other natural disasters. Other grants include Trade-WIA Dual Enrollment grants and Trade-Health Coverage Infrastructure grants.
Regular NEG grants may be available when a single or multiple company layoff affects 50 or more workers. NEG grants are also appropriate when layoffs are industry-wide within a region, or when small or rural communities are severely affected by layoffs of fewer than 50 people.
A number of resources are available to inform the state and local employment agencies of the policies that govern grant awards. Communities are urged to initiate the grant process early, to ensure that funds are available when needed.
Rhode Island is tough on unemployment insurance fraud. Adelita S. Orefice, Director of the Rhode Island Department of Labor and Training, (DLT), recently announced that DLT prosecuted 26 individuals for unemployment insurance fraud in 2006, resulting in recovery of $196,517.
The 26 cases prosecuted under the Rhode Island unemployment insurance fraud laws include 4 cases where more than $10,000 was recovered from each. Director Orefice noted that individuals who fraudulently collect unemployment insurance benefits would be aggressively pursued for criminal charges.
As of today, there are currently 59 cases of alleged Rhode Island unemployment insurance fraud pending final disposition from the court system, involving a total of $416,184. Director Orefice emphasized, “Prevention, detection, and elimination of fraud and abuse in the UI program are one of our top priorities. We want to ensure that eligible individuals receive unemployment benefits-we don’t want fraud and theft to eat away at this important safety net.”
Unemployment insurance (UI) compensates clients who are unemployed through no fault of their own and are actively seeking work. Raymond Filippone, Assistant Director for Income Support, confirmed, “If DLT discovers that claimants have received UI benefits through fraudulent means, we require immediate reimbursement of overpayments in order for those claimants to avoid criminal prosecution and conviction.”
Unemployment Insurance fraud is a serious crime that can result in a criminal record. DLT may seek penalties under the laws, which can include a felony charge for each offense. Conviction may result in incarceration and/or restitution, and may bring the additional charges of court costs and fines along with community service. Examples of fraud include giving false information, and failing to report earnings from self-employment or other work performed while collecting UI benefits.
The majority of this year’s cases under the Rhode Island unemployment insurance fraud laws involved individuals who collected unemployment while working. Most of the cases involved overpayments of $3,000 to $9,000, plus court costs.
Maintaining the integrity of Rhode Island’s Unemployment Insurance program is a key priority for the UI Administration,” reiterated Filippone. “We take a strong stand against anyone who tries to defraud the UI system. It is critical that we protect the integrity of the UI program in Rhode Island to ensure it remains financially secure and the funds are available to help those who are legitimately entitled to Unemployment Insurance benefits.”
Here’s more good news for Rhode Island employers and employees. The state’s economy continues with a positive outlook.
The most recent unemployment figures show that the Rhode Island unemployment rate was unchanged from November 2006. The December 2006 data, the most recent available, show that a seasonally adjusted unemployment rate of 5.2 percent.
The number of unemployed Rhode Islanders edged down by just 400 over the month to 29,800 in December. Rhode Island’s jobless rate remained above the national average, which held steady at 4.5 percent in December.
“Our unemployment rate remained stable last month at 5.2 percent,” said Director Orefice. “Although jobs were down slightly, we did see an increase in the number of Rhode Island residents working last month.”
Employment at Rhode Island businesses decreased by 400 jobs last month, bringing the December job count to 493,200 (seasonally adjusted). Job losses were reported in a number of sectors. The Professional & Business Services sector, which lost 600 jobs; Trade, Transportation & Utilities sector lost 400 jobs; Educational & Health Services sector lost 200 jobs; and finally the Government sector also lost 200 jobs.
Job growth in small employment partially offset the job losses. Small employment gains of 200 jobs each were reported in 2 sectors: the Construction sector and the Other Services sector. sectors.
The increase in the small business Construction jobs sector was partly the result of unseasonably warm weather in December. This resulted from a milder than normal December, which resulted in fewer lost workdays. The Other Services sector posted an employment increase due to gains in Personal Services.
Over the year, jobs were up just 200 from the 493,000 jobs reported in December 2005. A number of sectors showed job growth over the year including Financial Activities, Educational & Health Services, Construction, and Professional & Business Services. Losses occurred in the manufacturing, Trade, Transportation & Utilities, Government, Leisure & Hospitality and Other Services sectors.
While we are on the topic of your questions, here is one that you should asking if you are a very large employer: What happens if I happen to have a massive lay off and many of my workers then go on to the unemployment insurance benefit list? How do I files some many reports to the unemployment insurance system?
Again, I can answer that question. (I am beginning to think I can answer any question, my loyal readers!) But again I will answer it using a particular state as an example. In this case, the state is Rhode Island, but in many instances, the particulars of Rhode Island’s unemployment system will largely be the same in most of the other states that we look at. So the example here is relevant to many of you employers out there.
So getting back to my point—what to do when an employer has a massive lay off and many of their employees find themselves on the unemployment benefits dole—such is the case in Rhode Island, especially in times like July and December. Many large employers and factories in the state of Rhode Island tend to shut down during those periods, for vacations, economic cycles, and such. So the state has a built in contingency in place to handle when all of these workers come looking for unemployment benefits.
The option for employers in this case is called the “mass filing.” What it involves is that a shut down or massive lay off of this nature must be of a specific duration. For example, the factory owner must know that they will reopen their facility come January after the holiday vacation season is over. On the other hand, an employer cannot do a mass filing if they are closing down their plant indefinitely because of, say, a bankruptcy. The state even recommends that the closing period be no longer than five weeks, and that the employer have a definite return to work date for all of the employees.
During busy times, such as July and December, when companies shut down for vacations, economic reasons, or during school vacations, employers have the option of “mass filing” claims for affected workers. To file, the shutdown/vacation period must be of specific duration, preferably no longer than 5 weeks, with a definite return-to-work date for employees. Employees can learn of potential benefits associated with the shutdown by reading Rhode Island Unemployment Insurance posters.
If all requirements are met, the Call Center mails forms to employers. Once returned, the Call Center processes the claims and makes payments as appropriate. There is an option to lay-offs, however.
Worksharing is a Rhode Island Department of Labor & Training sponsored program that provides employers with an alternative to the often-agonizing prospect of laying off workers when business declines. This program allows a business to reduce the hours and wages of all or a particular group of employees while at the same allowing those participating to receive partial unemployment insurance benefits to supplement lost wages. In essence Worksharing provides employers with the opportunity to retain skilled workers and allows workers to maintain their jobs.
Advantages of Workshare include the reduction of hiring and retaining costs when business improves, avoiding financial and emotional hardships for your employees, improving employee morale, and the ability to retain skilled workers.
WORKSHARING could be a viable alternative for companies considering layoffs. This program is available to any private employer with two or more employees – the same companies participating in UI and posting Rhode Island Unemployment Insurance posters. Employees who normally work 30 hours or more per week and who would normally be eligible to receive regular unemployment insurance benefits in Rhode Island are eligible to participate in Worksharing.
Just as with UI, and as stated on Rhode Island Unemployment Insurance posters, The employee must serve waiting period before receiving Worksharing benefits, unless one has already been served on existing claim.
Additionally, during the week, the individual must be employed as a member of an affected unit under an approved worksharing plan which was approved prior to that week, and the plan is in effect with respect to the week for which worksharing benefits are claimed, be able to work and be available for the normal workweek with the worksharing employer, and work all hours offered by the worksharing employer in any given week up to the employee’s usual weekly hours.
If an individual has earnings in the same week with another employer, those earnings will not affect the individual’s worksharing benefits. The employee can receive a maximum of 52 weeks of worksharing benefits during a single benefit year.