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By Benjamin Schaefer

Work-sharing programs, currently available in 26 states and the District of Columbia, allow employees to work reduced hours and collect a prorated payment from the state’s unemployment insurance (UI) fund. It’s an approach that allows employers to retain talent while cutting costs in tough economic times.

A photo of a mason at workNCSL’s Labor and Economic Development Committee recently participated in a call to discuss these programs—more formally referred to as short-time compensation (STC)—with Eric Seleznow, acting assistant secretary of Employment and Training Administration in the U.S. Department of Labor. He explained that under such programs, employers can avoid layoffs and instead reduce employee hours. The call also provided state lawmakers with information regarding federal financial incentives to create or update their respective programs.

Under such programs, the money an employee loses in income is supplemented by payments from the state’s UI fund. Because the state’s UI fund is only paying a portion of what it would have should the employee have been laid off, advocates say it saves taxpayer dollars.

To qualify for federal reimbursement dollars or grant funds to establish or revise a work-sharing program, states must verify their system meets the new federal guidelines. This includes provisions such as voluntary employer participation, reduction in hours of at least 10 percent but not more than 60 percent, and retention of health and retirement benefit plans (if offered) during usage of the STC program. The funds are available through August 2015, but because legislation will likely be needed to ensure state adherence to the new definition, action would likely need to be taken in 2014’s legislative sessions.

For more information on short-time compensation programs and the states currently offering them, please visit NCSL’s work share page. If you want further information on federal guidance, grant dollars available by state, model legislation, and more, click on the U.S. Department of Labor’s STC website.

You also can contact NCSLs  Ben Schaefer or Jon Jukuri for more information.

Benjamin Schaefer is a policy associate in NCSL's State-Federal Relations division. 

 

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.

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