$2.8M grant awarded to Michigan to launch a new program designed to prevent worker layoffs

WASHINGTON – The U.S. Department of Labor today announced the award of $2,840,535 to the state of Michigan to develop and promote a short-time compensation program, a layoff prevention program also known as "work-sharing."

STC programs allow 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 that would have been available to them had they been laid off entirely. This is a win-win program: employees keep their jobs – and benefits, such as employer-based retirement and health insurance – while employers maintain their skilled workforce and avoid having to hire and train new workers when business activity increases. This approach eases the strain on local economies, which acutely feel the impact of layoffs.

"Providing employers with tools like short-time compensation to retain their skilled workers during temporary business downturns is good for local communities, the state and the overall national economy," said U.S. Secretary of Labor Thomas E. Perez. "Michigan is leading by example by instituting this innovative program, and I encourage all states to take advantage of the federal resources that are available to start or expand programs of their own."

Michigan will allocate $946,845 of the available funds to implement its new STC program, while the remaining $1,893,690 will go toward educating the public about the advantages of STC, promoting the program and increasing enrollment of employers into the program.

The funding was made available through the Middle Class Tax Relief and Job Creation Act of 2012, which gives 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 in the program. States with an STC program may also be eligible to receive 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.