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A Comprehensive Guide To Short-Time Compensation Programs

Updated : August 4th, 2020

In response to the Coronavirus pandemic, the federal government has passed the New Coronavirus Aid, Relief, and Economic Security (CARES) Act. This financial relief program includes several programs such as PUC, FPUC, retirement plan provisions, and funding for Short-Time Compensation (STC) programs. 

What Is A Short-Time Compensation Program?

Short-Time Compensation, also known as shared-work program or work sharing, is an alternative to layoffs for employers whose available work has reduced. It allows employers to reduce working hours of employees instead of laying-off some employees. This program protects employers’ trained workforce and employees’ jobs during times of lowered economic activity. 

For instance, an employer might reduce his/her employees’ working hours by 10% instead of laying off 10% of his/her full-time workforce. 

STC or shared-work programs are administered by state governments. The requirements may vary with states but they must meet certain federal requirements to receive funding for the programs. This includes:

  • The reduction in number of hours worked must be in lieu of layoffs 
  • Employers must report the estimated number of layoffs that would have occurred in the absence of STC program
  • The amount of UC payable must be in a prorated portion of what the employee would be receiving if he/she did not participate in the program 
  • Employers who offer health, retirement, or other benefits must certify that participating employees are still continuing to receive the benefits even after their work hours has been reduced 

Who Can Qualify For An STC Program?

To be eligible for an STC program, employers must have an approved STC plan with an appropriate state agency. The STC application process is initiated by employers. 

To qualify for a shared-work program, employees must be determined to qualify for UC benefits. While receiving benefits under an STC plan, employees need not meet work search or availability requirements, but must be available for their normal workweek. If the state requires, the employees should also serve “waiting week,” a non-paid week.

Does The Short-Time Compensation Program Help Employees?

The STC program not only helps employers but employees as well. That is, those employees who have experienced a reduction in working hours and lost a portion of wages can collect a percentage of unemployment compensation (UC) benefits. 

Unemployment benefits generally replace half of an average employee’s wages. If an employee has experienced a 10% reduction in working hours, UC benefits would account to 5% of the employer’s wages before the working hours were reduced. Employees would therefore receive a combined income of 95%,i.e., 90% as wages plus 5% as STC. 

Which States Have A Short-Time Compensation Program?

27 states have STC programs that meet the federal definition under Code Section 3306(v), and 26 among them have operational programs. The states that offer STC programs include:

  1. Arizona
  2. Arkansas
  3. California
  4. Colorado
  5. Connecticut
  6. Florida
  7. Iowa
  8. Kansas
  9. Maine
  10. Maryland
  11. Massachusetts
  12. Michigan
  13. Minnesota
  14. Missouri 
  15. Nebraska
  16. New Hampshire
  17. New Jersey
  18. New York 
  19. Ohio
  20. Oregon
  21. Pennsylvania
  22. Rhode Island
  23. Texas
  24. Vermont
  25. Washington
  26.  Wisconsin

With extra funding available for STC programs under the CARES Act, it is expected that more states will implement these programs.

Where Can You Apply For STC Programs? 

You can apply for STC programs through your state’s Unemployment Insurance agency. But before applying you must draw up a plan which must include: 

  • How many working hours will be reduced?
  • How many employees will be affected due to reduced hours?
  • How will the employees be notified about the reduced work hours?

It should also include:

  • A statement that benefits will be provided to employees even after reducing work hours
  • An estimate of the number of employees who would be laid off if a STC program is not implemented
  • Certification that affected employees can take part in training to upgrade their job skills during the shared-work program

Details Required While Applying For STC Program

You have to provide several information while applying for a shared-work program. They include:

  • Your company’s name, telephone number, address, fax number, and contact details for an authorized representative
  • Names and social security numbers of employees who are affected due to reduced work hours
  • Your tax account number 

Is An STC Benefit Taxable Income?

Yes, an STC benefit is taxable income. Individuals who have received STC benefits should fill a Form 1099-G from the state where they have filed a claim, to show the amount received. 

Closing Thoughts

STC programs can help you not only retain trained employees but also improve the morale of your business by avoiding layoffs. For employees, these programs do not replace 100% income but can help you if your work hours are reduced. However, if you are still laid off under unfortunate circumstances, you can apply for other unemployment benefits programs like Pandemic Emergency Unemployment Compensation (PEUC) program, etc. under the CARES Act. 

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  1. So I have been getting ue for 6 months and on Oct 21 I had a fact finding issue found and cleared after taking a month, I got put on hold I got nothing no benefits nothing because I am on hold until cleared up and it was another month later in my favor, I’ve been without payment since Oct 21 since then I have been on HOLD, I am beyond pissed, I call every Fri I see the letter I received saying its in my favor that says I am Monetary Eligible-yet I still have 6 payments on hold. I call DEO and I talk, I beg and I get told “we are working on it”, the letter is in my favor I am poor not rich I am poor Why how do you people get away with this

  2. Hello

    I’m 59 years old and was laid off in March 2020 due to Covid.
    In June 2020 I was advised my job was eliminated and there is no chance of me
    Being brought back. I’m collecting UI since March.

    Pondering the thought of taking my early retirement pension as I can’t survive on
    UI any longer. My pension is of course reduced due to my age. Full pension is age 62.

    If I apply for early reduced pension in this situation, does my UI benefit get decreased? I’m in New York.
    I’m still looking for full time work. No luck.

    Thank you so much
    Lorraine

  3. i was just layed off from my job, i did collect benefits in pa. my job is seasonal igot unemployment payments in jan. to april i had 26 weeks of unemployment , but only used about 13 weeks, and was called back to work. i received 2 weeks of 600 dollars of stimlus money. my question is now that i reopened my 2020 claim . i,m i still elegibe for any more stimlus payments along with my regular unemployment payments.

  4. I am 65 yrs old in California and being layed off in Dec 2020. If I apply for unemployment benefits and collect a company pension, will the pension reduce the unemployment benefits ? If you answer call unemployment what is the department or do you have a phone number for a help line. I have called and get automated questions that do not apply to my situation.
    Cannot get to a live person.

  5. Several years ago I was part of a reduction in force and was early-retired for pension purposes. I count on this small pension ($2K/mo) to supplement my employment which has been inconsistent this past two years. I am filing for UI in IL and I qualify for it, but they are saying my pension reduces my UI benefit to zero. Is that right?

    1. Mike,

      That is partially right. The pension will have an impact on UI benefits. Please check for relevant info on the Unemployment Office’s website.

  6. I have $219.00 left on my UE and still no work due to covid-19 will i be able to get a extension on my UE and will it cover the last two weeks. I request payment tomorrow.

      1. My benefits have expired, still.unemployed due to over 65, wdiebrtes, high blood pressure and have one kidney, Can I get PUA , Cares Act for any assistance

  7. im working at a place i have been layed off from a lot in my career.i got 30 yrs in there so i can retire now but need another job to make it hoping to stay working and get more hours.If i take a new job and get layed off there I will BE DRAWING 1400 A MONTH FROM THE JOB I WORKED 30 YRS would i be able to draw unemployment if the new job lays me off and would it be reduced because of my retirement money of 1400 month.

  8. My bf was laid off in April he got the the 600 to start with now he is only getting the unemployment and no extra when we hear ppl getting 3 checks totaling 40k that might be lies but still that is bullshit.

  9. I Sharon Bland or Sharon Scott or Sharon Ann Mccraw
    Use my phone to claim two of my boyfriends and my own benefits. Is that ok ?

  10. I’m getting pua on employment and it was supposed to be backdated to May 27th when I wasn’t ableable to start my new job and somehow it’s August 24th they said it would be backdated been sending messages and pua people keep saying they have emailed you guys too but nobody gets back to me who do I need to contact about this thank you

  11. I check my checking account balance every week but I cannot tell if I am getting my 300.00 extra unemployment. Also. How can I tell if I got my back time unemployment .

    1. Thelma,

      I did not understand what you meant. Please reach out to the Unemployment Office for precise answers to all your questions.

  12. I have exhausted my UI and all extensions. Not eligible for Fed Ed. Does EDD open a PUA claim for me. Or do I have to aoole for it. Its been past 30 days since receiving my Fed Ed denial letter.

  13. i have been unemployed for the whole year almost and since i have been trying to distance myself to better my all around health, it took me this long to file for benefits, i was hoping to get back pay all the way to the beginning.

    1. Zach,

      To qualify, the claimant is required to have sufficient earnings/employment during the “Base Period”. Please use the “Benefits Calculator” available on this website for more.

  14. Thank you o much for investigating this. When I received an overpayment statement and my benefits where stopped I felt my heart drop to my stomach. Already being evicted by a slumlord and now no income, i had to start working when i feel very at risk for getting the virus because of pre-existing conditions and the reason for filing in the first place. i am a cosmetologist and considered non-essential. I feel utterley hopeless and helpless in this situation.

  15. I cannot contact anyone in the unemployment offices because the phone hangs up on me in all cases after listening over and over the recorded message. I have called three numbers .

    I have received pandemic unemployment since March 31st. There was a pending adjudication but I never received any questions, letters nor emails about it and I was approved and paid. Now…this is what the website says:
    7 of 7 entries
    Issue Identification Number Employer Name Issue Type Status Date Mailed Level
    0002 7693 59-01
    PUA Pending 11/16/2020 Adjudication
    0002 4773 71-01
    Program Integrity Mailed 11/6/2020 Adjudicati
    Claimant Inbox
    Select the Search button to display your action items. To narrow your search, input issue date range below and select the Search button.
    Issue Date: From: To: 11/6/2020 to 11/16/2020
    Inbox
    • Below are the items that require your attention and that you need to take action on for your claim.
    • Select the Document ID
    I need this money to survive as others do while I am trying to re-establish any contract freelance work I am capable of doing….I report my small jobs as I get them but they do not come close to equaling my unemployment as of yet. Please tell me where I can go to find out what is needed here.

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