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To minimize layoffs, employers cut worker hours

The practice is spreading as the US unemployment rate hits 7.6 percent.

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But some work experts wonder if cutting hours is such a good idea. “It’s hard to get a team of people giving it their all when you’ve reduced their pay,” says Roberta Chinsky Matuson, president of Human Resource Solutions in Northampton, Mass. “This is particularly true if you have asked them to do more work than they have been required to do before.”

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She worries that many people will be forced to get a second job. “They may like the other job better or be so exhausted [that] they may not be rested.”

In Elmira, Mr. Simons says his workforce seems to have accepted the cut in hours, considering the alternatives. “They read the paper and see what’s going on,” he says. “We have another company, Corning, up here, and they have announced a layoff of 3,500, and most people know that.”

Under New York State law, the Hardinge workers are eligible for unemployment payments for the loss of a paid day of work each week.

According to Oakland, Calif.-based Maurice Emsellem, a lawyer at the National Employment Law Project, the states are “all over the place” on paying for reduced hours.

Thirty states require an unemployed worker to seek full-time employment while receiving benefits. The federal Unemployment Insurance Modernization Act under consideration in Congress, part of the Obama economic stimulus plan, would offer states incentives to improve benefits coverage for part-time workers.

Another thing that could help workers is if they anticipate that a work reduction is temporary. That’s the case for Katie Corrigan, who had her hours cut in half at a Boston recruiting firm last month. She envisions that the business will pick up once the economy recovers.

“They will be calling on us. They will have to beef up their ranks,” she says. “We will be well positioned.”

It helps, Ms. Corrigan says, that she likes the company. “What it comes down to is if it’s a company that you want to stay with, you will make the sacrifices over the short term to get the job back,” she says.

For those who have had their hours sliced, however, there are adjustments. In Tacoma, Wash., waitress Kristen Olson has seen her hours at a local coffee shop cut from 35 hours a week to 20. Next month, she plans to move in with a roommate since she can’t afford rent by herself. And, she says, she either “sticks to happy hours” for dinner or makes a big pot of spaghetti that will last the week.

The reduction in overtime at some companies can also be difficult for workers. In Jackson, Tenn., Bodine Aluminum has eliminated overtime for much of its workforce. “Some people bought houses and vehicles based on a 40-hour-plus workweek,” says Thaddessus Watford, a quality-control employee. “I’ve heard a few are in danger of losing their homes, and everyone is feeling the effects of it.”