The U.S. Department of Labor (DOL) issued additional guidance regarding federal reimbursement of certain state Short-Time Compensation (STC) payments, as well as other changes to STC programs under the CARES Act.
The STC program, also known as “work-sharing” or “shared work,” is a layoff aversion program in which an employer, under a state-approved plan, reduces the hours for a group of workers. These workers in turn receive a reduced unemployment benefit payment. This program preserves employees’ jobs and employers’ workforces during disruption to regular business activity by reducing hours of work for an entire group of affected employees rather than laying off some employees while others continue to work full time.
Section 2108 of the CARES Act provides for temporary 100% federal financing of STC payments in a state with a STC program, whether that program is new or pre-existing. Section 2109 provides for a state without a qualifying STC program to enter into an agreement with the Secretary of Labor to operate a temporary federal STC program. Section 2110 provides $100 million in grants to support states in implementing and administering STC programs. Section 2111 provides that the department will give technical assistance and guidance to states implementing STC programs.
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