Michigan awarded $2.8M to improve and expand work-sharing program

The U.S. Dept. of Labor announced last week that Michigan has been awarded $2.8 million to enhance and expand its short-time compensation program (STC), which is designed to help prevent layoffs through “work-sharing”. STC programs are administered through the federal-state unemployment compensation system and allow employers to reduce employee work hours during tough economic times as an alternative to laying them off. Through the STC program, employees who have had their hours reduced receive some percentage of the weekly unemployment benefits that they would have received if they had been completely laid off.  

The Dept. of Labor says the program is a “win-win” for both employees – who keep their jobs and benefits – and employers – who don’t have to hire and train new employees when business picks back up and can maintain continuity. The negative effects layoffs can have on local economies are also avoided.

"Providing employers with tools like short-time compensation to retain their skilled workers during temporary business downturns is good for local communities, the state and the overall national economy," said U.S. Secretary of Labor Thomas E. Perez in a press release. "Michigan is leading by example by instituting this innovative program, and I encourage all states to take advantage of the federal resources that are available to start or expand programs of their own."

The funds awarded to Michigan are part of a grant-based program with nearly $100 million made available through the Middle Class Tax Relief and Job Creation Act of 2012. According to information from the Dept. of Labor, grant funds are available to states for the “implementation or improved administration of an STC program or to promote and enroll employers in an STC program”.

Each state has a designated allotment from the $99.75 million available: 2/3 of the money each state is allotted will be used to promote and enroll employers into the program, while the remaining 1/3 will be used to implement or improve a STC.  Michigan will allocate about $950,000 to implement the new short-time compensation program and the remaining funds will be used for public education, promotion and increasing enrollment. 

To learn more about STC programs, visit http://stc.workforce3one.org/.