Short-Time Compensation and Job Preservation

“Short-term compensation (STC) provided partial unemployment insurance (UI) benefits to eligible workers placed on short work schedules. These UI benefits provided partial compensation for the reduction in hours worked. STC programs caused hours reductions to be spread more widely within the workforce when compared to reductions through layoffs and help to maintain employment. The paper examined STC programs in the United States and in Belgium, Canada, Germany and Italy. It described recent STC legislation in the United States and discusses ways to increase STC utilization” (p.3-4). (Abstractor: Author)

“Viewed from a cross-county perspective…STC in the United States is a small-scale program. Across the 17 states with long-standing programs, however, measurable contrasts in program scale are observed” (p.10). The Author makes the following recommendations to increase the use of STC in the US: • "Disseminate information about STC and its advantages to employers and workers" (p.13). • "Ensure that STC plans are easy to implement, especially at the early stages of a downturn" (p.13). • "Modify the financing of STC benefits...(to) reward STC employers for maintaining employment and reducing layoffs" (p.13). • "Provide a different treatment of STC benefit payments from regular UI benefits in charging against a worker’s maximum benefit amount, or MBA” (p.13). (Abstractor: Author and Website Staff)

• Last Updated:
• Created:
• Resource Publication Date: 2013
• Author(s): Vroman, Wayne
• Organizational Author(s): Urban Institute
• Funding Source: Ford Foundation
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies