Short-time compensation programs expand in 13 states with nearly $38M in grants to prevent layoffs

WASHINGTON — Losing a job is a difficult experience — fraught with uncertainty, fear and stress. Finding a new job is time-consuming and lost income creates a financial burden. For employers, layoffs can also be costly. Trimming staff when business slows means if new employees are needed when business picks back up, the employer faces the cost of training and lower productivity as workers acclimate.

With $37,814,386 in new U.S. Department of Labor grants, employers in 13 states will soon have a new tool that may help them avoid layoffs by helping states develop a new, or enhance an existing, Short-Time Compensation program. The states of Arkansas, California, Connecticut, Illinois, Iowa, Massachusetts, Missouri, New Hampshire, New York, Pennsylvania, Rhode Island, Texas and Wisconsin are the recipients of the grants.

"Employers want to do right by their workers, and offering them resources to be flexible during tough business cycles is not only good for business, it's good for our economy," said U.S. Secretary of Labor Thomas E. Perez. "States that incorporate Short-Time Compensation programs are helping their employers be more nimble, keeping more workers on the job and reducing the burden on unemployment insurance programs."

Commonly known as "work sharing," STC programs allow employers facing economic difficulty to reduce work hours for a group of employees as an alternative to layoffs. Programs allow workers with reduced hours to supplement their lowered wages with a percentage of the weekly unemployment compensation that would have been available to them had they been laid off entirely. STC lets employees keep their jobs — and benefits such as employer-based retirement and health insurance — and helps employers keep skilled workers and avoid the costs of hiring and training new workers when business recovers. The program also eases the strain on local economies, which acutely suffer when layoffs occur.

Since grants for STC programs enhancements were first authorized by the Middle Class Tax Relief and Job Creation Act of 2012, a total of $50,461,663 have been awarded to 17 states. Michigan, Ohio, Oregon, Texas and Washington State were previously funded.

For more information about starting an STC program, visit http://stc.workforce3one.org.

Editor's Note: A chart listing the states receiving awards and the grant amounts follows this release.