US Labor Department Announces Guidance to State Unemployment Insurance Agencies on Implementing Short-Time Compensation or "Work Sharing'

Press Release

By:  Hilda Solis
Date: June 18, 2012
Location: Washington, DC

The U.S. Department of Labor today announced guidance to state agencies responsible for Unemployment Insurance regarding short-time compensation, commonly referred to as "work sharing." Today's announcement is the latest in a series of innovative reforms to the UI program made possible by the Middle Class Tax Relief and Job Creation Act of 2012 signed by President Obama in February.

"Work sharing is a win-win for workers and employers," said Secretary of Labor Hilda L. Solis. "This program will provide more flexibility to workers and employers so they may more efficiently and effectively weather the ups and downs of the economy."

Work sharing allows employees to keep their jobs and helps employers to avoid laying off their trained workforces during economic downturns by reducing the hours of work for an entire group of affected workers. Workers affected by reduced hours can have their wages compensated with a portion of their weekly unemployment compensation payments.

The guidance issued today provides detailed information about a new federal definition of short-time compensation -- which includes more worker protections such as maintenance of health insurance and retirement benefits -- as well as how states currently operating short-time compensation programs can transition to the new definition. The guidance also provides information to states that already have permanent short-time compensation programs on how to begin receiving 100 percent federal reimbursement of payments made by state programs.

The Labor Department will issue additional guidance to address other aspects of short-time compensation found in the Middle Class Tax Relief and Job Creation Act of 2012, including a two-year federal initiative to enable states to quickly implement and try out short-time compensation programs; and the provision of approximately $100 million in grants to states for the implementation or improved administration of, or for promotion of and enrollment in, a short-time compensation program. The department also is developing model legislative language, to be provided in the near future, that will assist states in amending their laws so they can adopt short-time compensation programs.

For more information about the guidance issued today, read the Unemployment Insurance Program Letter 22-12 distributed by the Labor Department's Employment and Training Administration at http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=9382.