Washington state wins $2.1M grant from US Labor Department to enhance its short-time compensation layoff prevention program

WASHINGTON — The U.S. Department of Labor today announced the award of $2,136,749 to the state of Washington to improve and further promote the state’s short-time compensation program, a layoff prevention program also known as "work-sharing."

The STC program allows employers to reduce work hours for a group of employees as an alternative to layoffs during tough economic times. With STC, workers affected by reduced hours have their lowered wages supplemented by a percentage of the weekly unemployment compensation available to them. This is a win-win program: employees keep their jobs — and benefits — while employers maintain their skilled workforce and avoid having to hire and train new workers when business activity increases again. This approach eases the strain on local economies, which acutely feel the impact of layoffs.

"Innovative programs like short-time compensation will help to keep businesses in Washington competitive and agile while providing an extra layer of financial security for workers during challenging economic periods," said U.S. Secretary of Labor Thomas E Perez. "I encourage every state to take advantage of the available federal incentives to develop or expand STC programs nationwide."

Of the funds awarded, Washington will allocate $708,445 for enhancements to the STC program, while the remaining $1,428,304 will go toward educating the public about the advantages of incorporating an STC program and increasing enrollment of employers into the program.

This funding was made available through the Middle Class Tax Relief and Job Creation Act of 2012, which gave the secretary of labor authority to award grants to states to implement or improve an STC program, as well as promote the program and enroll employers. States with an STC program may also be eligible to receive 100 percent reimbursement from the federal government for STC benefits paid.

For more information about starting an STC program and how states can take advantage of federal financial incentives, visit http://stc.workforce3one.org.