UPDATED: U.S. Department of Labor Issues Guidance Announcing the Availability of $100 Million in Short-Time Compensation Grant Funds for States

WASHINGTON, D.C. – The U.S. Department of Labor (Department) has issued guidance announcing the availability of grant funds provided under Section 2110 of the Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020.

“The short-time compensation programs are a vital resource for states in phased reopening,” said Assistant Secretary for Employment and Training John P. Pallasch. “By facilitating the expansion of an important tool states can utilize to help bring Americans back to work, we hope that states leverage these funds when developing their re-opening plans.”

Section 2110 provides up to $100 million for grants to states with short-time compensation (STC) programs in their laws that conform to the requirements of section 3306(v) of the Federal Unemployment Tax Act (FUTA).  Grants are available for the implementation or improved administration of an STC program and for the promotion of the program and enrollment of employers in an STC program. The guidance issued today provides instructions about the process to apply for these grants and encourages eligible states to submit STC grant applications. The deadline to apply for these grants is December 31, 2023.

An STC program enables an employer, under a state-approved plan, to reduce the hours for a group of workers and, in turn, the workers will receive a reduced unemployment benefit payment.  In the context of re-opening businesses closed temporarily by the pandemic, STC can serve as a means of bringing most or all of a temporarily laid-off workforce back to the job. States may make this benefit available to individuals returning to work with reduced hours who worked for the employer prior to the temporary layoff due to the coronavirus pandemic.  The program also serves as a layoff aversion program,  preserving employees’ jobs and employers’ trained workforces during a disruption to the firm’s regular business activity by reducing hours of work for an entire group of affected employees.

The Department encourages states to contact its Employment and Training Administration for technical assistance on coronavirus-related issues, and please copy your Regional ETA Office on the email. 

For further information about the coronavirus, please visit the Centers for Disease Control and Prevention.

The mission of the Department is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

Editor’s note: This release was updated to more fully describe the program.