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SHORT-TIME COMPENSATION A Viable Layoff Aversion Strategy for Employers Place verbiage in a footprint or circle center stage parking lot. State logo here

What Is Short-Time Compensation? Short-time compensation, also known as worksharing or shared work, preserves jobs and an employer’s trained workforce during declines in 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. STC cushions the adverse effect of the reduction in business activity and keeps employees on-the-job for when business demand increases.  

Here’s How it Works Rather than being laid off, eligible employees work a reduced number of hours in the work week and receive a portion of their weekly unemployment compensation (UC) payment based on the percentage of the reduction in hours.

Here’s How STC Compares to a Layoff Pat Smith normally works 40-hours per week & earns $600 in regular pay. Under the STC program, Pat’s hours are reduced by 1 day of work per week- from 5 days to 4 days (20% reduction). How does this compare to a total layoff for Pat? [Note: Example provided for illustration purposes. State can revise numbers to reflect salary and UC payment typical for workers in the state] 100% Layoff Unemployment Compensation 20% Work Reduction Short-Time Compensation Total weekly UC payment $300 4 days regular pay (80% of $600) $480 + Weekly STC payment $60 _____________________________ Total weekly income: $540 (Versus $600 at 40 hours for regular, full-time work)

Why Should Employers Choose STC?

STC Helps Employers Temporarily reduces amount of wages payable Keeps work teams in-place and skilled workers on the payroll Maintain product/service quality levels with skilled workers

STC Keeps Workforce in Place Preserves skilled employees Prevents an employer from having to re-invent recruitment strategies when new business needs appear Alleviates the costs associated with hiring, re-hiring and training new employees when business picks up

STC Helps Employees Employee maintains health and retirement benefits Employees spared the hardships associated with total unemployment Supports employee morale

Assistance is Available State STC staff are available to help you launch and maintain your program

In Conclusion… STC protects an employer’s greatest asset – employees! When business is down, employers keep their workforce intact and employees on-the-job and ready for when business demand increases.

Want to Learn More? Staff Contact: Telephone: E-mail: Website: Back to Table 1