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2012 federal short-time compensation provisions
Summary ETA explained the 2012 federal definition of short-time compensation, or work sharing, and what state programs needed to satisfy it. The letter covered transition rules, temporary federal reimbursements and a federal program option for states without conforming laws, as well as grant funding. Several of those funding periods have ended; Change 1 later supplied model state legislation. Attachments include the statutory text, draft agreement, funding addendum and state grant amounts.
Document
Federal guidance
Agency
U.S. Department of Labor, Employment and Training Administration (ETA)
Document number
UIPL No. 22-12
Date issued
June 18, 2012
Status
Active
ETA’s advisory listing marks this letter Active as of 2026-10-24, and its PDF lists the expiration date as Continuing. Several funding and transition periods described in the letter ended in 2014 or 2015; see later Change 1 for model state legislation.
Status last verified October 24, 2026
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About this page: The full text below is the official document from U.S. Department of Labor, Employment and Training Administration (ETA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
UIPL 22-12 (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_22_12_Acc.pdf)
CLASSIFICATION
EMPLOYMENT AND TRAINING ADMINISTRATION Unemployment Insurance
ADVISORY SYSTEM CORRESPONDENCE SYMBOL
OUI/DL
U.S. DEPARTMENT OF LABOR
DATE
Washington, D.C. 20210
June 18, 2012
ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 22-12
TO: STATE WORKFORCE AGENCIES
FROM: JANE OATES
Assistant Secretary
SUBJECT: Short-Time Compensation Provisions in the Middle Class Tax Relief and Job
Creation Act of 2012
1. Purpose. To provide an overview of all of the provisions in Subtitle D of Title II of the
Middle Class Tax Relief and Job Creation Act of 2012 that concern short-time compensation
or “worksharing” programs, and to provide guidance to the state agencies about the new
definition of short-time compensation in Federal unemployment compensation law, the
transition period for states currently administering a short-time compensation program, and
100% Federal reimbursement of certain state short-time compensation benefits.
2. References. Section 194 of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982
(Public Law (Pub. L.) 97-248); Section 401 of the Unemployment Compensation Amendments
of 1992 (Pub. L. 102-318); Title II of the Middle Class Tax Relief and Job Creation Act of
2012, (Pub. L. 112-96), The Layoff Prevention Act of 2012 (Subtitle D of Title II of Pub. L.
112-96); Federal Unemployment Tax Act (FUTA; 26 U.S.C. 3301 et seq.); Section 303(a)(5)
of the Social Security Act (SSA); Sections 414(i) and (j) of the Internal Revenue Code (IRC);
and Unemployment Insurance Program Letter (UIPL) No. 45-92.
3. Background. Short-time compensation (STC), also known as worksharing or shared work
programs, preserves employees’ jobs and employers’ trained workforces during disruptions to
a firm’s regular business activity by reducing hours of work for an entire group of affected
employees rather than by laying off some employees while others continue to work full time.
STC provides a portion of a weekly unemployment compensation (UC) payment to certain
individuals whose workweeks have been reduced. STC cushions the adverse effect of the
reduction in business activity on workers and ensures that these workers will be available to
resume prior employment levels when business demand increases.
Initially, states were authorized to implement temporary STC programs using funds from their
accounts in the Unemployment Trust Fund (UTF) in the Tax Equity and Fiscal Responsibility
Act of 1982 (Pub. L. 97-248). The Unemployment Compensation Amendments of 1992 (Pub.
L. 102-318) added permanent statutory authority for states to fund STC from the UTF and
established certain requirements in its definition of an STC program.
RESCISSIONS EXPIRATION DATE
None Continuing
On February 22, 2012, the President signed into law Pub. L. 112-96, the Middle Class Tax
Relief and Job Creation Act of 2012 (the Act), which contains many provisions concerning the
UC program. This issuance provides initial guidance on the provisions in Subtitle D of Title II
of the Act, the Layoff Prevention Act of 2012 (hereinafter all references to sections are to the
Act) pertaining to STC. Subtitle D does the following:
a. Modifies the definition from that in Pub. L. 102-318 of the term “short-time
compensation” by adding a new Section 3306(v), FUTA. States are not required to
enact an STC program. However, state STC programs must operate consistent with
the provisions in the new subsection (v). Subtitle D also provides a transition period
for states with STC laws to conform to the new definition and requirements. (Section
2161)
b. Provides 100 percent Federal reimbursement of certain STC benefit costs paid by
states operating an STC program under their own law consistent with the provisions
of Section 3306(v), FUTA, for up to 3 years. Subtitle D also provides a transition
period during which states operating STC programs before enactment of Subtitle D
may qualify for reimbursement of benefit costs if their laws do not conform to the
requirements in Section 3306(v), FUTA. (Section 2162)
c. Allows states without STC programs meeting the new definition in Section 3306(v)
to enter into an agreement with the Secretary of Labor (Secretary) to operate a
Federal STC program for up to 2 years, with the state receiving reimbursement for
one-half of the amount of STC paid to individuals under the agreement and the
employer paying the remaining one-half of STC benefit costs. (Section 2163)
d. Provides for grants to states for the implementation or improved administration of, or
promotion and enrollment in, STC programs meeting the new definition. (Section
2164)
e. Directs the Secretary, after consultation with stakeholders, to develop model
legislative language, guidance, and reporting requirements for use by states in
developing and enacting STC programs. (Section 2165)
f. Requires the Secretary to submit a final report on the implementation of the
provisions of Subtitle D no later than 4 years after the date of enactment. (Section
2166)
As required by statute, Section 2165(c), Pub. L. 112-96, the Department of Labor
(Department) consulted with employers, labor organizations, state workforce agencies, and
other program experts about model legislative language, guidance, and reporting. A Notice of
Listening Sessions on Implementation of Unemployment Insurance Provisions of the Middle
Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112–96) was published at 77 Federal
Register 16074 (March 19, 2012) and two listening sessions were held. Recordings of these
sessions are at https://www.workforce3one.org/view/5001206850055897580/info and
https://www.workforce3one.org/view/5001206850373490082/info.
4. Definition of Short-Time Compensation Program. The term “short-time compensation” is
defined in new subsection (v) of Section 3306, FUTA, which became effective on the date of
enactment, February 22, 2012. States are not required to enact an STC program into law;
however, states may not operate an STC program that does not conform to this definition,
except as provided in Section 2161(a)(3), which is discussed further in section 5 of this
guidance. A short description of the elements of this definition in each numbered paragraph of
Section 3306(v), FUTA, and how they compare to the elements of the prior definition of
“short-time compensation” in Federal law is provided below.
a. “(1) the participation of an employer is voluntary;”
This is the same as prior law. Employer participation has always been voluntary in
STC programs.
b. “(2) an employer reduces the number of hours worked by employees in lieu of
layoffs;”
This is a modification from the prior definition. Previously, the STC definition
required a reduction in hours worked by employees in lieu of temporary layoffs. The
removal of the word temporary may enable a state UC agency to approve more
applications by employers to participate in an STC program since the employer is no
longer required to reasonably expect that the layoff be temporary. The use of the
word “layoffs” means that the employing unit affected must consist of at least two
workers.
c. “(3) such employees whose workweeks have been reduced by at least 10 percent, and
by not more than the percentage, if any, that is determined by the State to be
appropriate (but in no case more than 60 percent), are not disqualified from
unemployment compensation;”
This is a modification from prior law.
Consistent with prior law, employees participating in STC must not be disqualified
from UC on account of their STC participation.
However, prior law required a reduction in the workweek of at least 10 percent. No
maximum percentage was provided under the prior law. Federal law now establishes
both a minimum (10 percent) and maximum (60 percent) percentage by which
individuals’ workweeks may be reduced. The states may determine the range as long
as it falls within those parameters.
d. “(4) the amount of unemployment compensation payable to any such employee is a
pro rata portion of the unemployment compensation which would otherwise be
payable to the employee if such employee were unemployed;”
This is the same as prior law. STC weekly benefit amounts have always been defined
as a proportion of the UC weekly benefit amount payable for a week of total
unemployment equivalent to the proportion of the workweek that had been reduced.
Thus, individuals must be monetarily eligible for UC and have remaining entitlement
to UC in order to receive an STC weekly benefit amount.
e. “(5) such employees meet the availability for work and work search test requirements
while collecting short-time compensation benefits, by being available for their
workweek as required by the State agency;”
This is the same as prior law.
f. “(6) eligible employees may participate, as appropriate, in training (including
employer-sponsored training or worker training funded under the Workforce
Investment Act of 1998) to enhance job skills if such program has been approved by
the State agency;”
This is an expansion of the requirement in prior law because it permits the state UC
agency to approve STC plans providing for both employer-sponsored training and
Workforce Investment Act (WIA) training to improve job skills. Previously, only
employer-sponsored training could be included in an STC plan. The addition of WIA
training should provide more training opportunities to STC participants. As under
previous law, any training must be approved by the state agency.
g. “(7) the State agency shall require employers to certify that if the employer provides
health benefits and retirement benefits under a defined benefit plan (as defined in
section 414(j)) or contributions under a defined contribution plan (as defined in
section 414(i)) to any employee whose workweek is reduced under the program that
such benefits will continue to be provided to employees participating in the short-time
compensation program under the same terms and conditions as though the workweek
of such employee had not been reduced or to the same extent as other employees not
participating in the short-time compensation program;”
This is a new requirement, although many states already have STC laws that contain
similar provisions. The employer may not reduce the health or specified retirement
benefits to individuals participating in the STC program. However, this prohibition
on reductions does not apply if a reduction (described in more detail below) in such
health and specified retirement benefits also apply to employees not participating in
STC.
Health Benefits. As part of any application to participate in a STC program, an
employer that provides health benefits to an employee who has a reduced workweek
under the employer’s STC plan must certify that such benefits will continue to be
provided to the employee under the same terms and conditions as though the
employee’s workweek were not reduced.
For purposes of this certification, employees participating in the employer’s STC plan
must be allowed to maintain coverage under the same terms and conditions as
employees not participating in the STC plan. If coverage under the group health plan
requires employee contributions, employees who participate in the STC plan may still
be required to make such contributions in order to maintain their coverage.
Notwithstanding the above, a change in health benefits applicable to employees who
are not participating in the STC plan may also apply to employees who participate in
the STC plan.
Retirement Plans. As part of any application to participate in a STC program, an
employer that maintains a retirement plan (either a defined benefit plan or a defined
contribution plan) for an employee who has a reduced workweek under the
employer’s proposed plan must certify that benefits (in the case of a defined benefit
plan) and contributions (in the case of a defined contribution plan) will continue to be
provided to the employee under the same terms and conditions as though the
employee’s workweek were not reduced.
For purposes of this certification, employees participating in the employer’s STC plan
must be allowed to maintain coverage in the retirement plan under the same terms and
conditions as employees not participating in the STC plan. The hours that were
reduced under the STC plan must be credited for purposes of participation, vesting,
and accrual of benefits as though the workweek had not been reduced. The dollar
amount of employer contributions to a defined contribution plan that are based on a
percentage of compensation may be less due to the reduction in the employee’s
compensation. Notwithstanding the above, a reduction in benefits under a defined
benefit plan or a reduction in contributions under a defined contribution plan,
applicable to employees who are not participating in the STC program may also apply
to employees who participate in the employer’s STC plan.
h. “(8) the State agency shall require an employer to submit a written plan describing
the manner in which the requirements of this subsection will be implemented
(including a plan for giving notice, where feasible, to an employee whose workweek
is to be reduced) together with an estimate of the number of layoffs that would have
occurred absent the ability to participate in short-time compensation and such other
information as the Secretary of Labor determines is appropriate;”
This is a new requirement, although state laws generally require employers to submit
an application to participate in the STC program. However the requirement that the
state law specify that any STC application will require the employer to specify how
the plan meets the new requirements of Section 3306(v), FUTA, is generally new for
states. Of particular note, the plan will have to specify how workers will be notified
of the STC plan in advance, if feasible, and provide an estimate of the number of
workers who would be laid off if the employer does not participate in STC. If
advance notice is not feasible, the Department requires that the application explain
why it is not feasible. If the affected unit is covered by a collective bargaining
agreement, it will be sufficient to provide an explanation in the application of how
notification to the bargaining agent will be provided.
i. “( 9) the terms of the employer’s written plan and implementation shall be consistent
with employer obligations under applicable Federal and State laws;…”
This is a new requirement. Now, state STC law must require the employer to attest,
as part of its STC application, that participation in the STC program is consistent with
the employer’s obligations under state and Federal law.
j. “(10) upon request by the State and approval by the Secretary of Labor, only such
other provisions are included in the State law that are determined to be appropriate
for purposes of a short-time compensation program.”
This is a new provision intended to give states the flexibility to include, upon state
request and approval by the Secretary, additional STC requirements. Many state STC
laws currently contain additional requirements for employer or employee participation
in the STC program. We will issue additional guidance explaining the process by
which states may request that the Secretary approve any additional provisions other
than those specifically included in Section 3306(v), FUTA.
5. Transition Period for State STC Laws to Conform to New Definition. While the new
definition of STC in Section 3306(v), FUTA, became effective on February 22, 2012, Section
2161(a)(3) provides for a transition period for states administering STC programs on that date.
The term “administering” means the state’s STC law is in effect, and the state agency
responsible for administering the STC program has established operating guidelines and has
informed employers and workers about the STC program, regardless of whether any STC
payments have been made. If a state’s law cannot be administered consistent with this new
definition, the state may continue to administer its current STC law until the earlier of the
effective date of state law changes conforming to this new STC definition or the “date that is 2
years and 6 months after the date of the enactment of this Act,” August 22, 2014.
Thus, if any state that had not been administering an STC program on February 22, 2012,
enacts a law providing for an STC program after that date, the enactment must conform to the
definition in Section 3306(v), FUTA. In addition, a state administering a non-conforming
STC program on February 22, 2012, must amend its law to conform to Section 3306(v),
FUTA, effective no later than August 22, 2014, in order to continue operating its STC program
after that date.
6. Temporary Reimbursement of Eligible STC Costs Paid Under State Law.
a. In General. Section 2162 provides for Federal reimbursement of state STC benefit
costs. Reimbursement is available for up to 156 weeks to states whose STC laws
conform to the definition in Section 3306(v), FUTA. States with current STC laws
that do not conform to this definition may get reimbursement only during the two and
one-half year transition period (130 weeks) discussed in subsection b below.
Reimbursements are available for weeks of unemployment beginning after the date of
enactment (in most states, the week beginning February 26, 2012) until the week of
unemployment ending on or before the date that is 3 years and 6 months after the date
of enactment, August 22, 2015 (in most states, the week of unemployment ending
August 22, 2015).
In order to qualify for reimbursement of STC costs paid under state law, the state’s
STC provisions are not required to be permanent. However, in order to qualify for a
grant, as explained in section 9 below, a state’s STC law may not be subject to
discontinuation.
b. Transition Period for States Administering State STC Laws on the Date of
Enactment. For states whose laws do not conform to Section 3306(v), Federal
reimbursement is available if their STC programs had been administered on or before
February 22, 2012. Reimbursement is available during the transition period described
in section 5 above (up to 2 years and 6 months—in most states, until the week of
unemployment ending on August 23, 2014). If at any point during the transition
period the state enacts conforming legislation, it then becomes eligible for the full 156
weeks of reimbursement available until August 22, 2015. For weeks of
unemployment beginning after August 22, 2014 (in most states, the week beginning
August 24, 2014), there will be no reimbursement of STC costs if a state law does not
conform to Section 3306(v), FUTA.
c. States Transitioning from Operating a Federal STC Program Under Agreement with
the Secretary to a State STC Program Eligible for 100 percent Reimbursement.
Section 2163 provides 50 percent Federal reimbursement of STC benefit costs for
states paying Federal STC benefits under an agreement with the Secretary. (See
section 8 of this UIPL.) Any state that operated a Federal STC program under an
agreement and transitions to a state STC program may receive the 100 percent
reimbursement for state STC benefits paid with respect to weeks of unemployment
beginning after the effective date of a new state STC law conforming to Section
3306(v). However, the combined number of weeks of reimbursement under Section
2163 and Section 2162 may not exceed 156.
d. Limitations on Reimbursement. The statute establishes two limitations on
reimbursement of state STC costs. First, no reimbursement will be made when STC
is paid to an individual during a benefit year in an amount that exceeds 26 times the
amount of regular UC (including dependents’ allowances) for a week of total
unemployment. Second, no reimbursement will be made for payment of STC to an
individual if the individual is employed by the employer on a seasonal, temporary or
intermittent basis, as defined under state law. This limitation does not include
individuals employed on a part-time basis whose hours are reduced under an STC
plan.
If state law does not include definitions of these terms, states will use the following
for determining which state STC benefits are subject to 100 percent Federal
reimbursement:
Seasonal Employment: Employment with an employer who experiences at least a
20 percent difference between its highest level of employment during a particular
season and its lowest level of employment during the off-season in each of the
previous 3 years as reported to the state agency, and/or employees are hired to work
on a temporary basis by employers that need extra help during a particular season.
Temporary Employment: Employment where an employee is expected to remain in
a position for only a limited period of time and/or is hired by a temporary agency to
fill a gap in an employer’s workforce.
Intermittent Employment: Employment that is not continuous but may consist of
periodic intervals of weekly work and intervals of no weekly work.
e. Charging of STC Benefits. Federal law permits states to reduce employers’ state
unemployment tax rates from a “standard” rate only on the basis of their “experience
with respect to unemployment or other factors bearing a direct relation to
unemployment risk .…” (Section 3303(a), FUTA). As states generally measure
employers’ experience with unemployment via UC payments made to their former
employees, states charge UC benefits, which includes STC, to employers’ accounts
when unemployment is in the direct or indirect control of employer, or when the
unemployment is due to general economic, trade, or other business reasons.
Similarly, Federal law provides that employers who opt to reimburse UC benefits,
which includes STC, rather than pay experience-rated state unemployment taxes,
must reimburse “the amounts of compensation attributable under the State law to such
service” (Section 3309(a)(2), FUTA). Therefore, the Department requires states to
require reimbursing employers to reimburse the STC costs attributable to the service
for these employers.
The intent of the “experience rating” requirement in Federal law is to equitably
allocate the cost of UC among employers, with employers who cause more
unemployment generally paying higher state unemployment taxes than employers
who cause less unemployment. Even though employers participating in STC
programs under section 2162 of the Act are directly causing unemployment (or STC
payments are attributable to service with the employer) by reducing the hours their
employees work, because the associated UC costs are being reimbursed by the
Federal government by an amount equal to 100 percent of the amount of STC paid to
participating employees, states may (if permissible under state law) choose not to
charge (or not to require reimbursement of) STC payments that are subject to the 100
percent reimbursement by the Federal government. States choosing to charge (or
require reimbursement of) the benefits may not, however, apply special rules to these
STC payments, but must follow the provisions of state law applying to all charges
(and reimbursements) for STC payments. When the 100 percent Federal
reimbursement ends, states must again apply their charging provisions to STC
payments.
As a reminder, if a state permits payment of STC in excess of 26 times the amount of
regular compensation payable for a week of total unemployment, or to individuals
employed by a participating employer on a seasonal, temporary, or intermittent basis,
those STC payments will not be reimbursed. Accordingly, the state must charge the
employer for these benefits (or require reimbursement) consistent with state law.
Further, all STC payments made by a state for a week of unemployment for which
100 percent Federal reimbursement is not made must also be charged (or reimbursed)
consistent with state law.
When considering whether or not to relieve employers from charging (or
reimbursement) if permissible under state law, states should take into consideration
the potential effect on the solvency of their accounts in the Unemployment Trust Fund
(UTF) and, for states that are receiving advances to pay benefits, the additional
advances and associated interest payments that may result. In addition, as the
schedule of state unemployment tax rates that is effective in a year is typically based
on the balances in states’ accounts in the UTF, states should be mindful that this
decision may also impact the schedule of taxes that becomes effective in any given
year.
f. Agreements. In order to receive reimbursement for eligible STC payments made
under state law, each state that may qualify for reimbursement must enter into an
agreement with the Secretary that describes the responsibilities of the parties
consistent with Section 2162 and includes a description of the estimation
methodology that will be used to provide funds to states at the beginning of each
month (see Attachment II). This agreement may be signed by the Administrator of
the state agency responsible for administering the state UC program, if the
Administrator has the authority under state law to do so.
Each potentially qualifying state must also sign an addendum to the Fiscal Year 2012
Annual Funding Agreement for the UI Program (see Attachment III). This addendum
is also applicable to other UI-related provisions in Pub. L.112-96. The addendum
must be signed by the governor of the state, or the governor’s designee.
States planning to enter into agreements for reimbursement of state STC benefit costs
should contact the appropriate Regional Office to request copies of these agreements
that have been signed by the Secretary before getting signatures from the appropriate
state officials. Both signed agreements must be submitted via email to the following
address: [email protected].
g. Financial Information: Payments to States for State STC Benefit. Section 2162
provides for l00 percent Federal reimbursement of the amount of STC paid to
individuals under state STC laws, subject to the limitations in subsection d. above.
Eligible reimbursements for state STC benefit costs will be provided to each
qualifying state on a monthly basis. At the beginning of each month, estimated state
STC benefit payments eligible for reimbursement, taking into account surpluses or
shortfalls from prior months’ allocations, will be made available in the Payment
Management System (PMS) for state drawdown. Funds drawn down must be
deposited into a state’s account in the UTF or Benefit Payment Account where Cash
Management Improvement Act of 1990 (CMIA) requirements apply. After the
agreements cited in subsection f. are signed, the first payment will be made available
in the PMS in an amount equal to the estimated eligible state STC benefit payments
for weeks of unemployment beginning after the date of enactment through the month
following the month in which this guidance is issued. Estimates for eligible amounts
needed for any month will generally be equal to state STC amounts eligible for
reimbursement in the most recent month for which data is reported on the ETA 2112
report, adjusted for any excess or shortfall provided in prior months for which actual
data available are above or below that month’s allocation. The Grant Officer will
assign a separate line on the UC program notices allowing for issuance of obligational
authority for state STC benefit funds, and a separate sub-account for STC will be
established in the PMS for states to draw down reimbursements of state STC benefit
funds. This will function identically to benefit funding for Trade Readjustment
Assistance and Wage Insurance benefits.
Funds should be withdrawn from the PMS as needed, in compliance with CMIA
requirements, to meet state STC benefit expenses. Any deposits to state accounts in
the UTF of previously disbursed STC benefits eligible for Federal reimbursement
should be communicated to the Bureau of Public Debt as a credit to “State UI
Withdrawal”. An offsetting reduction to “net UI [unemployment insurance] Benefits”
reported on the ETA 2112, line 31, column F should accompany such credits This
would effectively reverse the state transactions involving funds previously withdrawn
and disbursed for STC benefits.
7. Reporting.
a. ETA 2112. (OMB No. 1205-0154). Transactions involving STC benefits reimbursed
with Federal funds must be reported in the aggregate on the electronic ETA 2112
report. Information reflecting these STC transactions must be reported as follows:
1) Line 23b, Short-Time Compensation - Federal. Report on line 23b, column F
the amount of Federally reimbursed STC funds deposited into the state’s benefit
payment account.
2) Line 31, Net UI Benefits. Line 31 should exclude all state STC benefit
payments paid for using Federal funds. When STC payments issued in previous
months are reimbursed with Federal funds, the amount of Federal reimbursement
should be netted out of line 31. STC benefits paid for using regular state UTF
funds should continue to be included on line 31.
3) Line 42b, Short-Time Compensation - Federal. Report on line 42b, column F
the net amount of state STC benefits paid that are eligible for Federal
reimbursement. States are to report gross STC benefit disbursements in column F
regardless of whether amounts of Federal tax withholdings are applied to STC
benefit payments.
b. ETA 5159. (OMB No. 1205-0010). The STC-specific report form for the ETA 5159
has one additional cell that must be reported. This cell describes the number of
employers with STC agreements.
1) Section D cell C10, Number of Participating Employers. Enter the total
number of employers who have entered into agreements with the state that would
provide for potential STC benefit payments to claimants. If a single employer has
multiple agreements with the state, or multiple agreements within an
establishment, count that employer only once.
8. Temporary Federal STC Programs Operated Under Agreement with Secretary. Section
2163 permits a state to enter into an agreement with the Secretary to operate a Federal STC
program. The payment of STC under this provision is not based on state UC law but upon an
agreement with the Secretary, similar to how states pay Emergency Unemployment
Compensation. This allows a state’s employers and workers to benefit from an STC program
even if that state’s law does not presently provide for the payment of STC. Below is a brief
summary of the applicable statutory requirements. Additional guidance on this provision is
forthcoming.
The authority for a state to enter into an agreement with the Secretary to pay Federal STC
expires no later than “the date that is 2 years and 13 weeks after the date of enactment of this
Act,” that is, May 24, 2014. States may pay STC benefits under this temporary Federal
program for no more than 104 weeks. As noted above in section 6(c), states are permitted to
be reimbursed for state STC costs for up to 156 weeks. However, it is important to note that
the number of weeks that a state pays Federal STC benefits will result in a reduction in the
total number of weeks the state may receive reimbursement for STC payments made under its
state law. Thus, if the state pays Federal STC by agreement for 20 weeks, and subsequently
enacts an STC law meeting the requirements of Section 3306(v), FUTA, the 20 weeks of
Federal STC paid through agreement is deducted from the maximum of 156 weeks of 100
percent reimbursement of state STC costs.
While it is voluntary for a state to operate it, a state’s temporary Federal STC program must
conform to the definition of an STC program in Section 3306(v), FUTA. The state or the
Department may terminate the agreement with 30 days’ advance written notice.
Under the temporary Federal program, STC payments to an individual in a benefit year may
not exceed 26 times the amount of regular UC payable to such individual for a week of total
unemployment. In addition, states may not pay STC to individuals employed on a seasonal,
temporary, or intermittent basis.
Employers must pay one-half of the benefit costs of an employee participating in the
temporary Federal STC program. Amounts collected from employers under this provision
must be deposited in the state’s unemployment fund and may not be used for calculating the
employer's contribution rate. Section 2163(b)(3) requires employers to reimburse the state for
one-half of these STC costs, and provides that the reimbursement “shall be deposited in the
State’s unemployment fund and shall not be used for purposes of calculating an employer’s
contribution rate [that is, experience rate]” under section 3303(a)(1), FUTA. Accordingly,
this payment by the employer is a reimbursement for Federal STC benefits and may not be
credited to the employers’ reserve or applied as a voluntary contribution. The Federal
government will reimburse the state for the remaining one-half of Federal STC benefit costs
and for administrative expenses associated with operating this Federal STC program under
the Annual Funding Agreement Addendum.
9. Availability of and Criteria for Grants for State STC Programs. Grants for the
implementation or improved administration of an STC program, or for promotion and
enrollment of employers in an STC program are available under Section 2164. Below is a
brief summary of the applicable statutory requirements. Additional guidance on this issue is
forthcoming.
Section 2164 authorizes a total of 100 million dollars (less a reduction of 0.25 percent that the
Secretary may use to provide outreach and share best practices of STC programs) for these
grants. A state’s share will be determined using the same ratio as would apply under a Reed
Act distribution that would have been made October 1, 2010, under Section 903(a)(2)(B),
SSA. This means each state’s share is based on its proportionate share of FUTA taxable
wages multiplied by the $100,000,000 (less 0.25 percent). One-third of a state’s share is
available for grants for implementation or improved administration of an STC program. The
remaining two-thirds of a state’s share is available for grants for the promotion and enrollment
of employers in a conforming STC program. The Department will issue additional guidance
about these grants, including the eligibility criteria for the two-thirds’ share grants. The
deadline to apply for this grant is December 31, 2014.
Only states that have STC laws conforming to Section 3306(v), FUTA, may be approved for
these grants. Any state whose law is not certified under Section 3304, FUTA, or under Section
303, SSA, is not eligible to receive a grant. In addition, to qualify for a grant, a state’s STC
program may not be subject to discontinuation. If a state has a new STC enactment, it must be
effective within 12 months of the date of the Secretary’s certification to the Treasury.
States will be notified within 30 days of receipt of a complete application whether they have
been approved for a grant. If approved, the Secretary of Treasury will transfer the grant
amount to the state’s account in the UTF within seven days of receipt of the Department’s
certification.
The Secretary will recoup any grant awarded to a state if during the five-year period after the
award, the state terminates its STC program or otherwise fails to meet the Federal STC
requirements.
10. Model Legislation. Section 2165 requires the Secretary to develop model legislative language
and guidance for use by the states in developing and enacting STC programs. Based on the
feedback received during the consultation described in section 3. above, the Department is
drafting the model legislative language, which will be provided in subsequent guidance.
11. STC Study. Section 2166 requires the Secretary to report to Congress and the President on
the implementation of these provisions by February 22, 2016. The report must include a
description of best practices by states and employers in the administration, promotion and use
of STC; an analysis of significant challenges to the enactment and implementation of STC
programs; and a survey of employers in all states to determine the level of interest in STC
programs. The Department expects to work with states to carry out these activities.
12. Action Requested. Administrators are requested to provide this guidance to the appropriate
staff.
13. Inquiries. Questions should be directed to the appropriate Regional Office.
14. Attachments.
Attachment I: Text of Subtitle D – Short-Time Compensation Program
Attachment II: Text of Agreement
Attachment III: Addendum to FY2012 Annual Funding Agreement for Unemployment
Insurance (UI) Program
Attachment IV: Grants For STC Programs – Amounts
Attachment I (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_22_12_Att1.pdf)
Attachment I
Subtitle D—Short-Time Compensation
Program
SEC. 2160. SHORT TITLE.
This subtitle may be cited as the ‘‘Layoff Prevention Act of
2012’’.
SEC. 2161. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS.
(a) DEFINITION.—
(1) IN GENERAL.—Section 3306 of the Internal Revenue
Code of 1986 (26 U.S.C. 3306) is amended by adding at the
end the following new subsection:
‘‘(v) SHORT-TIME COMPENSATION PROGRAM.—For purposes of
this part, the term ‘short-time compensation program’ means a
program under which—
‘‘(1) the participation of an employer is voluntary;
‘‘(2) an employer reduces the number of hours worked
by employees in lieu of layoffs;
‘‘(3) such employees whose workweeks have been reduced
by at least 10 percent, and by not more than the percentage,
if any, that is determined by the State to be appropriate (but
in no case more than 60 percent), are not disqualified from
unemployment compensation;
‘‘(4) the amount of unemployment compensation payable
to any such employee is a pro rata portion of the unemployment
compensation which would otherwise be payable to the
employee if such employee were unemployed;
‘‘(5) such employees meet the availability for work and
work search test requirements while collecting short-time compensation
benefits, by being available for their workweek as
required by the State agency;
‘‘(6) eligible employees may participate, as appropriate, in
training (including employer-sponsored training or worker
training funded under the Workforce Investment Act of 1998)
to enhance job skills if such program has been approved by
the State agency;
‘‘(7) the State agency shall require employers to certify
that if the employer provides health benefits and retirement
benefits under a defined benefit plan (as defined in section
414(j)) or contributions under a defined contribution plan (as
defined in section 414(i)) to any employee whose workweek
is reduced under the program that such benefits will continue
to be provided to employees participating in the short-time
compensation program under the same terms and conditions
as though the workweek of such employee had not been reduced
or to the same extent as other employees not participating
in the short-time compensation program;
‘‘(8) the State agency shall require an employer to submit
a written plan describing the manner in which the requirements
of this subsection will be implemented (including a plan for
giving advance notice, where feasible, to an employee whose
workweek is to be reduced) together with an estimate of the
number of layoffs that would have occurred absent the ability
to participate in short-time compensation and such other
information as the Secretary of Labor determines is appropriate;
‘‘(9) the terms of the employer’s written plan and
implementation shall be consistent with employer obligations
under applicable Federal and State laws; and
‘‘(10) upon request by the State and approval by the Secretary
of Labor, only such other provisions are included in
the State law that are determined to be appropriate for purposes
of a short-time compensation program.’’.
(2) EFFECTIVE DATE.—Subject to paragraph (3), the amendment
made by paragraph (1) shall take effect on the date
of the enactment of this Act.
(3) TRANSITION PERIOD FOR EXISTING PROGRAMS.—In the
case of a State that is administering a short-time compensation
program as of the date of the enactment of this Act and the
State law cannot be administered consistent with the amendment
made by paragraph (1), such amendment shall take effect
on the earlier of—
(A) the date the State changes its State law in order
to be consistent with such amendment; or
(B) the date that is 2 years and 6 months after the
date of the enactment of this Act.
(b) CONFORMING AMENDMENTS.—
(1) INTERNAL REVENUE CODE OF 1986.—
(A) Subparagraph (E) of section 3304(a)(4) of the
Internal Revenue Code of 1986 is amended to read as
follows:
‘‘(E) amounts may be withdrawn for the payment of
short-time compensation under a short-time compensation
program (as defined under section 3306(v));’’.
(B) Subsection (f) of section 3306 of the Internal Revenue
Code of 1986 is amended—
(i) by striking paragraph (5) (relating to short time
compensation) and inserting the following new
paragraph:
‘‘(5) amounts may be withdrawn for the payment of short time
compensation under a short-time compensation program
(as defined in subsection (v)); and’’; and
(ii) by redesignating paragraph (5) (relating to self employment
assistance program) as paragraph (6).
(2) SOCIAL SECURITY ACT.—Section 303(a)(5) of the Social
Security Act is amended by striking ‘‘the payment of short time
compensation under a plan approved by the Secretary
of Labor’’ and inserting ‘‘the payment of short-time compensation
under a short-time compensation program (as defined in
section 3306(v) of the Internal Revenue Code of 1986)’’.
(3) UNEMPLOYMENT COMPENSATION AMENDMENTS OF 1992.—
Subsections (b) through (d) of section 401 of the Unemployment
Compensation Amendments of 1992 (26 U.S.C. 3304 note) are
repealed.
SEC. 2162. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION
PAYMENTS IN STATES WITH PROGRAMS IN LAW.
(a) PAYMENTS TO STATES.—
(1) IN GENERAL.—Subject to paragraph (3), there shall be
paid to a State an amount equal to 100 percent of the amount
of short-time compensation paid under a short-time compensation
program (as defined in section 3306(v) of the Internal
Revenue Code of 1986, as added by section 2161(a)) under
the provisions of the State law.
(2) TERMS OF PAYMENTS.—Payments made to a State under
paragraph (1) shall be payable by way of reimbursement in
such amounts as the Secretary estimates the State will be
entitled to receive under this section for each calendar month,
reduced or increased, as the case may be, by any amount
by which the Secretary finds that the Secretary’s estimates
for any prior calendar month were greater or less than the
amounts which should have been paid to the State. Such estimates
may be made on the basis of such statistical, sampling,
or other method as may be agreed upon by the Secretary
and the State agency of the State involved.
(3) LIMITATIONS ON PAYMENTS.—
(A) GENERAL PAYMENT LIMITATIONS.—No payments
shall be made to a State under this section for short time
compensation paid to an individual by the State
during a benefit year in excess of 26 times the amount
of regular compensation (including dependents’ allowances)
under the State law payable to such individual for a week
of total unemployment.
(B) EMPLOYER LIMITATIONS.—No payments shall be
made to a State under this section for benefits paid to
an individual by the State under a short-time compensation
program if such individual is employed by the participating
employer on a seasonal, temporary, or intermittent basis.
(b) APPLICABILITY.—
(1) IN GENERAL.—Payments to a State under subsection
(a) shall be available for weeks of unemployment—
(A) beginning on or after the date of the enactment
of this Act; and
(B) ending on or before the date that is 3 years and
6 months after the date of the enactment of this Act.
(2) THREE-YEAR FUNDING LIMITATION FOR COMBINED PAYMENTS
UNDER THIS SECTION AND SECTION 2163.—States may
receive payments under this section and section 2163 with
respect to a total of not more than 156 weeks.
(c) TWO-YEAR TRANSITION PERIOD FOR EXISTING PROGRAMS.—
During any period that the transition provision under section
2161(a)(3) is applicable to a State with respect to a short-time
compensation program, such State shall be eligible for payments
under this section. Subject to paragraphs (1)(B) and (2) of subsection
(b), if at any point after the date of the enactment of this Act
the State enacts a State law providing for the payment of short time
compensation under a short-time compensation program that
meets the definition of such a program under section 3306(v) of
the Internal Revenue Code of 1986, as added by section 2161(a),
the State shall be eligible for payments under this section after
the effective date of such enactment.
(d) FUNDING AND CERTIFICATIONS.—
(1) FUNDING.—There are appropriated, out of moneys in
the Treasury not otherwise appropriated, such sums as may
be necessary for purposes of carrying out this section.
(2) CERTIFICATIONS.—The Secretary shall from time to time
certify to the Secretary of the Treasury for payment to each
State the sums payable to such State under this section.
(e) DEFINITIONS.—In this section:
(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Labor.
(2) STATE; STATE AGENCY; STATE LAW.—The terms ‘‘State’’,
‘‘State agency’’, and ‘‘State law’’ have the meanings given those
terms in section 205 of the Federal-State Extended Unemployment
Compensation Act of 1970 (26 U.S.C. 3304 note).
SEC. 2163. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION
AGREEMENTS.
(a) FEDERAL-STATE AGREEMENTS.—
(1) IN GENERAL.—Any State which desires to do so may
enter into, and participate in, an agreement under this section
with the Secretary provided that such State’s law does not
provide for the payment of short-time compensation under a
short-time compensation program (as defined in section 3306(v)
of the Internal Revenue Code of 1986, as added by section
2161(a)).
(2) ABILITY TO TERMINATE.—Any State which is a party
to an agreement under this section may, upon providing 30
days’ written notice to the Secretary, terminate such agreement.
(b) PROVISIONS OF FEDERAL-STATE AGREEMENT.—
(1) IN GENERAL.—Any agreement under this section shall
provide that the State agency of the State will make payments
of short-time compensation under a plan approved by the State.
Such plan shall provide that payments are made in accordance
with the requirements under section 3306(v) of the Internal
Revenue Code of 1986, as added by section 2161(a).
(2) LIMITATIONS ON PLANS.—
(A) GENERAL PAYMENT LIMITATIONS.—A short-time
compensation plan approved by a State shall not permit
the payment of short-time compensation to an individual
by the State during a benefit year in excess of 26 times
the amount of regular compensation (including dependents’
allowances) under the State law payable to such individual
for a week of total unemployment.
(B) EMPLOYER LIMITATIONS.—A short-time compensation
plan approved by a State shall not provide payments
to an individual if such individual is employed by the
participating employer on a seasonal, temporary, or intermittent
basis.
(3) EMPLOYER PAYMENT OF COSTS.—Any short-time compensation
plan entered into by an employer must provide that
the employer will pay the State an amount equal to one half
of the amount of short-time compensation paid under such
plan. Such amount shall be deposited in the State’s unemployment
fund and shall not be used for purposes of calculating
an employer’s contribution rate under section 3303(a)(1) of the
Internal Revenue Code of 1986.
(c) PAYMENTS TO STATES.—
(1) IN GENERAL.—There shall be paid to each State with
an agreement under this section an amount equal to—
(A) one-half of the amount of short-time compensation
paid to individuals by the State pursuant to such agreement;
and
(B) any additional administrative expenses incurred
by the State by reason of such agreement (as determined
by the Secretary).
(2) TERMS OF PAYMENTS.—Payments made to a State under
paragraph (1) shall be payable by way of reimbursement in
such amounts as the Secretary estimates the State will be
entitled to receive under this section for each calendar month,
reduced or increased, as the case may be, by any amount
by which the Secretary finds that the Secretary’s estimates
for any prior calendar month were greater or less than the
amounts which should have been paid to the State. Such estimates
may be made on the basis of such statistical, sampling,
or other method as may be agreed upon by the Secretary
and the State agency of the State involved.
(3) FUNDING.—There are appropriated, out of moneys in
the Treasury not otherwise appropriated, such sums as may
be necessary for purposes of carrying out this section.
(4) CERTIFICATIONS.—The Secretary shall from time to time
certify to the Secretary of the Treasury for payment to each
State the sums payable to such State under this section.
(d) APPLICABILITY.—
(1) IN GENERAL.—An agreement entered into under this
section shall apply to weeks of unemployment—
(A) beginning on or after the date on which such agreement
is entered into; and
(B) ending on or before the date that is 2 years and
13 weeks after the date of the enactment of this Act.
(2) TWO-YEAR FUNDING LIMITATION.—States may receive
payments under this section with respect to a total of not
more than 104 weeks.
(e) SPECIAL RULE.—If a State has entered into an agreement
under this section and subsequently enacts a State law providing
for the payment of short-time compensation under a short-time
compensation program that meets the definition of such a program
under section 3306(v) of the Internal Revenue Code of 1986, as
added by section 2161(a), the State—
(1) shall not be eligible for payments under this section
for weeks of unemployment beginning after the effective date
of such State law; and
(2) subject to paragraphs (1)(B) and (2) of section 2162(b),
shall be eligible to receive payments under section 2162 after
the effective date of such State law.
(f) DEFINITIONS.—In this section:
(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Labor.
(2) STATE; STATE AGENCY; STATE LAW.—The terms ‘‘State’’,
‘‘State agency’’, and ‘‘State law’’ have the meanings given those
terms in section 205 of the Federal-State Extended Unemployment
Compensation Act of 1970 (26 U.S.C. 3304 note).
SEC. 2164. GRANTS FOR SHORT-TIME COMPENSATION PROGRAMS.
(a) GRANTS.—
(1) FOR IMPLEMENTATION OR IMPROVED ADMINISTRATION.—
The Secretary shall award grants to States that enact short time
compensation programs (as defined in subsection (i)(2))
for the purpose of implementation or improved administration
of such programs.
(2) FOR PROMOTION AND ENROLLMENT.—The Secretary shall
award grants to States that are eligible and submit plans
for a grant under paragraph (1) for such States to promote
and enroll employers in short-time compensation programs (as
so defined).
(3) ELIGIBILITY.—
(A) IN GENERAL.—The Secretary shall determine eligibility
criteria for the grants under paragraphs (1) and
(2).
(B) CLARIFICATION.—A State administering a short time
compensation program, including a program being
administered by a State that is participating in the transition
under the provisions of sections 301(a)(3) and 302(c),
that does not meet the definition of a short-time compensation
program under section 3306(v) of the Internal Revenue
Code of 1986 (as added by 211(a)), and a State with an
agreement under section 2163, shall not be eligible to
receive a grant under this section until such time as the
State law of the State provides for payments under a
short-time compensation program that meets such definition
and such law.
(b) AMOUNT OF GRANTS.—
(1) IN GENERAL.—The maximum amount available for
making grants to a State under paragraphs (1) and (2) shall
be equal to the amount obtained by multiplying $100,000,000
(less the amount used by the Secretary under subsection (e))
by the same ratio as would apply under subsection (a)(2)(B)
of section 903 of the Social Security Act (42 U.S.C. 1103)
for purposes of determining such State’s share of any excess
amount (as described in subsection (a)(1) of such section) that
would have been subject to transfer to State accounts, as of
October 1, 2010, under the provisions of subsection (a) of such
section.
(2) AMOUNT AVAILABLE FOR DIFFERENT GRANTS.—Of the
maximum incentive payment determined under paragraph (1)
with respect to a State—
(A) one-third shall be available for a grant under subsection
(a)(1); and
(B) two-thirds shall be available for a grant under
subsection (a)(2).
(c) GRANT APPLICATION AND DISBURSAL.—
(1) APPLICATION.—Any State seeking a grant under paragraph
(1) or (2) of subsection (a) shall submit an application
to the Secretary at such time, in such manner, and complete
with such information as the Secretary may require. In no
case may the Secretary award a grant under this section with
respect to an application that is submitted after December
31, 2014.
(2) NOTICE.—The Secretary shall, within 30 days after
receiving a complete application, notify the State agency of
the State of the Secretary’s findings with respect to the requirements
for a grant under paragraph (1) or (2) (or both) of
subsection (a).
(3) CERTIFICATION.—If the Secretary finds that the State
law provisions meet the requirements for a grant under subsection
(a), the Secretary shall thereupon make a certification
to that effect to the Secretary of the Treasury, together with
a certification as to the amount of the grant payment to be
transferred to the State account in the Unemployment Trust
Fund (as established in section 904(a) of the Social Security
Act (42 U.S.C. 1104(a))) pursuant to that finding. The Secretary
of the Treasury shall make the appropriate transfer to the
State account within 7 days after receiving such certification.
(4) REQUIREMENT.—No certification of compliance with the
requirements for a grant under paragraph (1) or (2) of subsection
(a) may be made with respect to any State whose—
(A) State law is not otherwise eligible for certification
under section 303 of the Social Security Act (42 U.S.C.
503) or approvable under section 3304 of the Internal Revenue
Code of 1986; or
(B) short-time compensation program is subject to discontinuation
or is not scheduled to take effect within 12
months of the certification.
(d) USE OF FUNDS.—The amount of any grant awarded under
this section shall be used for the implementation of short-time
compensation programs and the overall administration of such programs
and the promotion and enrollment efforts associated with
such programs, such as through—
(1) the creation or support of rapid response teams to
advise employers about alternatives to layoffs;
(2) the provision of education or assistance to employers
to enable them to assess the feasibility of participating in
short-time compensation programs; and
(3) the development or enhancement of systems to automate—
(A) the submission and approval of plans; and
(B) the filing and approval of new and ongoing short time
compensation claims.
(e) ADMINISTRATION.—The Secretary is authorized to use 0.25
percent of the funds available under subsection (g) to provide for
outreach and to share best practices with respect to this section
and short-time compensation programs.
(f) RECOUPMENT.—The Secretary shall establish a process under
which the Secretary shall recoup the amount of any grant awarded
under paragraph (1) or (2) of subsection (a) if the Secretary determines
that, during the 5-year period beginning on the first date
that any such grant is awarded to the State, the State—
(1) terminated the State’s short-time compensation program;
Or
(2) failed to meet appropriate requirements with respect
to such program (as established by the Secretary).
(g) FUNDING.—There are appropriated, out of moneys in the
Treasury not otherwise appropriated, to the Secretary, $100,000,000
to carry out this section, to remain available without fiscal year
limitation.
(h) REPORTING.—The Secretary may establish reporting requirements
for States receiving a grant under this section in order
to provide oversight of grant funds.
(i) DEFINITIONS.—In this section:
(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Labor.
(2) SHORT-TIME COMPENSATION PROGRAM.—The term ‘‘short time
compensation program’’ has the meaning given such term
in section 3306(v) of the Internal Revenue Code of 1986, as
added by section 2161(a).
(3) STATE; STATE AGENCY; STATE LAW.—The terms ‘‘State’’,
‘‘State agency’’, and ‘‘State law’’ have the meanings given those
terms in section 205 of the Federal-State Extended Unemployment
Compensation Act of 1970 (26 U.S.C. 3304 note).
SEC. 2165. ASSISTANCE AND GUIDANCE IN IMPLEMENTING PROGRAMS.
(a) IN GENERAL.—In order to assist States in establishing,
qualifying, and implementing short-time compensation programs
(as defined in section 3306(v) of the Internal Revenue Code of
1986, as added by section 2161(a)), the Secretary of Labor (in
this section referred to as the ‘‘Secretary’’) shall—
(1) develop model legislative language which may be used
by States in developing and enacting such programs and
periodically review and revise such model legislative language;
(2) provide technical assistance and guidance in developing,
enacting, and implementing such programs;
(3) establish reporting requirements for States, including
reporting on—
(A) the number of estimated averted layoffs;
(B) the number of participating employers and workers;
And
(C) such other items as the Secretary of Labor determines
are appropriate.
(b) MODEL LANGUAGE AND GUIDANCE.—The model language
and guidance developed under subsection (a) shall allow sufficient
flexibility by States and participating employers while ensuring
accountability and program integrity.
(c) CONSULTATION.—In developing the model legislative language
and guidance under subsection (a), and in order to meet
the requirements of subsection (b), the Secretary shall consult with
employers, labor organizations, State workforce agencies, and other
program experts.
SEC. 2166. REPORTS.
(a) REPORT.—
(1) IN GENERAL.—Not later than 4 years after the date
of the enactment of this Act, the Secretary of Labor shall
submit to Congress and to the President a report or reports
on the implementation of the provisions of this subtitle.
(2) REQUIREMENTS.—Any report under paragraph (1) shall
at a minimum include the following:
(A) A description of best practices by States and
employers in the administration, promotion, and use of
short-time compensation programs (as defined in section
3306(v) of the Internal Revenue Code of 1986, as added
by section 2161(a)).
(B) An analysis of the significant challenges to State
enactment and implementation of short-time compensation
programs.
(C) A survey of employers in all States to determine
the level of interest in participating in short-time compensation
programs.
(b) FUNDING.—There are appropriated, out of any moneys in
the Treasury not otherwise appropriated, to the Secretary of Labor,
$1,500,000 to carry out this section, to remain available without
fiscal year limitation.
Attachment II (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_22_12_Att2.pdf)
Attachment II
DRAFT DRAFT DRAFT
Layoff Prevention Act of 2012
100 Percent Reimbursement of Short Time Compensation
Benefit Costs Paid Under State Law
AGREEMENT BETWEEN
THE STATE OF _______________________________
AND
THE SECRETARY OF LABOR, U.S. DEPARTMENT OF LABOR
The Secretary of Labor, U.S. Department of Labor, and the State of
____________________________, in order to carry out the provisions of the Subtitle D of Title
II of the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96), hereinafter
referred to as the “Act,” hereby agree as follows:
I. The __________________________________ State Workforce Agency,
hereinafter referred to as the “Agency,” will make payments of Short-Time
Compensation (STC) benefits in accordance with the Act (which is incorporated herein
by reference), and will cooperate with the U.S. Department of Labor (Department), and
with other state agencies in making such payments.
II. The Agency and other appropriate state officials will perform all of the functions
and duties undertaken under this Agreement in accordance with the terms of this
Agreement and the regulations, operating instructions, or guidance issued by the
Department of Labor.
III. If the Agency’s State law was being administered on February 22, 2012 and it
cannot be administered consistent with the definition of an STC program in Section
3306(v), FUTA, unless the State amends its law in order to conform to those
requirements effective no later than August 23, 2014, the State may not continue to make
State STC payments nor receive reimbursement of State STC benefit costs with respect to
weeks of unemployment beginning after August 23, 2014.
IV. The Agency will maintain such records pertaining to the administration of the Act
as the Department requires, and will make all such records available for inspection,
examination, and audit at such time and by such federal officials or employees as the
Department may designate or as may be required by law.
V. The Agency will furnish to the Department or its agents such information and
reports, and will fully participate in any studies or evaluations the Department determines
are necessary or appropriate for carrying out the purposes of the Act.
VI. The Department will make available in the Payment Management System an
amount equal to 100 percent of the estimated amount needed by the State for payment of
STC eligible for Federal reimbursement during that month, adjusted for any excess or
shortfall in amounts provided in any prior month. The first payment to the State will be
made available after the State signs this agreement and the addendum to the FY 2012
Annual Funding Agreement for the Unemployment Compensation (UC) Program, in an
amount equal to the estimated State STC payments from the date of enactment through
the month following the month in which STC guidance is issued, based on State STC
payments as reported on the ETA 5159. At the beginning of each month thereafter, the
estimated amounts needed for payment of eligible State STC to be made available will
generally be equal to eligible State STC amounts paid in the most recent month for which
data are reported, adjusted for any excess or shortfall in amounts provided in prior
months. The Department intends to use the State STC reported on the ETA 2112 as the
basis for estimates and adjustments except that the initial allocation will be based on the
ETA 5159 report as described above.
In making STC payments, the Agency agrees that:
a. No payments shall be made to the Agency for STC paid to any individual in
excess of 26 times the amount of regular compensation (including dependents’
allowances) under the State law payable to the individual for a week of total
unemployment.
b. No payments shall be made to the Agency for benefits paid to any individual
by the Agency under an STC program if such individual is employed by the
participating employer on a seasonal, temporary, or intermittent basis.
c. No payment shall be made to the Agency with respect to more than 156 weeks
of STC benefits.
d. No payments shall be made to the Agency under an STC program for weeks of
unemployment ending on or after August 23, 2015.
VII. The Agency will use all funds paid to the State for the payment of benefits solely
for the purpose of STC. The Agency will return to the United States Treasury, upon
request of the Department, any such funds (a) if the Department finds that the funds were
not needed for such purpose or that the funds have been used for a purpose other than that
for which they were intended, or (b) upon termination of this Agreement. The “Audit
Requirements for Grants, Contracts, and other Agreements,” 29 CFR 96, will apply to
disagreements under this section.
VIII. The Agency will take such action as reasonably may be necessary to recover for the
account of the United States all benefit amounts improperly paid and restore any lost or
misapplied funds paid to the State for benefits or the administration of this Agreement.
IX. To the extent that agencies of the State obtain bonds to protect funds of the State,
the Agency will obtain bonds to protect funds made available to it for the payment of
benefits and the costs of administration of this Agreement. The pro rata cost of such
bonds shall be considered a necessary cost of administration. If under State law the State
acts as a self-insurer of State funds and does not obtain bonds to protect them, the
Agency shall so inform the Department in writing, and in such case the State will act as a
self-insurer with respect to funds which are paid to the State under this Agreement.
X. The Agency will apply the methods of administration required by Section 303(a)(1)
of the Social Security Act (42 U.S.C. 503(a)(1)) to the functions undertaken under this
Agreement.
XI. This Agreement may be terminated by either party on thirty days written notice. If
this Agreement is terminated, the Agency will process and pay benefits for all weeks of
unemployment, which end before the date of termination for which such payments are
due.
XII. This Agreement shall be effective beginning when both parties have signed it.
________________________________________________
Secretary of Labor Date
U.S. Department of Labor
By ___DRAFT ONLY – Not for Signature __
(State Signatory)
____________________________________
(Title)
DATED: _________________________________
For the State of ___________________________
---------------------------------------------------------------------------------------------------------------------
CERTIFICATION OF AUTHORITY
NAME DRAFT ONLY – Not for Signature___
TITLE ____________________________
I hereby certify that the above-named person has the authority under the Constitution and laws of
this State to sign this Agreement on behalf of the State.
Signature: __DRAFT ONLY – Not for Signature
Title: _______________________________
Date: _______________________________
Attachment III (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_22_12_Att3.pdf)
Attachment III
DRAFT
UNEMPLOYMENT INSURANCE (UI) PROGRAM
FY 2012 ANNUAL FUNDING AGREEMENT ADDDENDUM
for
MIDDLE CLASS TAX RELIEF AND JOB CREATION ACT OF 2012
Grant/Agreement No. UI-XXXXX CFDA # 17.225 Unemployment Insurance
(To be completed by DOL) CFDA#17.207 Employment Service
1. Relationship to Other Agreements: Unless inconsistent with specific terms and conditions
provided herein, the terms and conditions of the Fiscal Year (FY) 2012 UI Program annual
funding agreement between the U.S. Department of Labor, Employment and Training
Administration (Grantor) and the STATE/COMMONWEALTH of (Grantee) apply to the
funds identified in Section 2 and are hereby incorporated by reference.
2. Grant Funds: This annual funding grant agreement addendum addresses additional
requirements applicable to funds appropriated in the Middle Class Tax Relief and Jobs Creation
Act of 2012 (the Act) for Reimbursement of Short-Time Compensation (STC) benefit payments.
3. Purposes and Principles: A major goal of the Act is to have State Workforce Systems pursue
strategies that would positively impact employment levels by satisfying certain needs of
unemployed workers and employers. To that end the Act makes funds available to states
engaging in programs that have been shown capable of supporting the goal. Funds are also
made available to evaluate the various strategies to help determine their effectiveness and to
understand their impact on workers, employers, and the labor market. Consistent with
transparency and accountability principles, reporting and monitoring of activities and associated
funding are essential, and grantees are expected to support these activities through compliance
with all related requirements.
4. Limit on Funds: Funds appropriated or otherwise made available to states by the Act are to be
strictly used for the intended purposes as stated in agreements and guidance or operating
instructions issued by the Department.
5. Reporting: Program Management and Financial Expenditure: For the purposes of
funding, accountability, monitoring, administering, and evaluating the various programs and
activities required or permitted by the Act, the Grantee agrees to furnish timely to the
Department such information, as approved by OMB under the Paperwork Reduction Act, as
the Department, or representative, requests. The manner in which states will satisfy such
requests will be conveyed in guidance issued by the Department.
6. Applicable Authority: Funds provided under the Act and provided under this grant
agreement addendum must be expended in accordance with all applicable Federal statutes,
regulations, policies, and guidance.
7. Grant Expenditure Period: The period of availability of funding varies for the different
components and will be provided in the Notice of Obligation as funding is provided.
8. Notice of Obligation: Funds will be obligated and allocated via a Notice of Obligation (NOO)
grant modification to the FY 2012 annual funding agreement/grant. Obligations and costs may
not exceed the amount obligated by the NOO modification unless otherwise modified by the
Grantor. Upon execution of this addendum, the NOO modification to the FY 2012 grant will
be issued. Funds are obligated for the amount indicated in the NOO grant modification
document in accordance with the Grantee’s UI allotment levels. The Federal obligation level
will be amended by the Grant Officer to increase (or adjust) amounts available to the Grantee
as funds become available for obligation and additional NOO (or Deobligation) grant
modifications are required and issued.
9. Signatory Information: By signing below, the signatories agree to the terms and conditions of
this agreement addendum on behalf of their respective agencies indicated below. In addition, the
Grantee’s expenditure of any funds properly granted hereunder constitutes acceptance of the
award, including any new or additional terms and conditions as may be attached hereto.
GRANTEE:
(State/Commonwealth)
TAX EIN# _________________________
Agency Name
PMS EIN# _________________________
Mailing Address (If known)
______________________________________ PMS PIN ACCT#____________________
______________________________________ DUNS#____________________________
BY___________________________________________________________________________
Governor/Authorized Signatory Signature Date
(Print name)
Title______________________ Email
Address_________________________________
FOR GRANTOR: U.S. Department of Labor/Employment and Training Administration
200 Constitution Ave NW; Room N-4716; Washington, DC 20210
__________________________________________________________________
THOMAS C.MARTIN Signature Date
Grant Officer
Attachment IV (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2012/UIPL_22_12_Att4.pdf)
Attachment IV
GRANTS FOR STC PROGRAMS - AMOUNTS
State Total Share 1/3 Share 2/3 Share
AK $240,772 $80,257 $160,515
AL $1,414,715 $471,572 $943,143
AR $879,937 $293,312 $586,625
AZ $1,955,074 $651,691 $1,303,383
CA $11,593,587 $3,864,529 $7,729,058
CO $1,819,895 $606,632 $1,213,263
CT $1,260,659 $420,220 $840,439
DC $416,291 $138,764 $277,527
DE $312,075 $104,025 $208,050
FL $5,913,909 $1,971,303 $3,942,606
GA $3,072,385 $1,024,128 $2,048,257
HI $440,074 $146,691 $293,383
IA $1,061,207 $353,736 $707,471
ID $456,199 $152,066 $304,133
IL $4,307,659 $1,435,886 $2,871,773
IN $2,074,861 $691,620 $1,383,241
KS $1,031,988 $343,996 $687,992
KY $1,330,647 $443,549 $887,098
LA $1,501,852 $500,617 $1,001,235
MA $2,366,515 $788,838 $1,577,677
MD $1,832,552 $610,851 $1,221,701
ME $413,881 $137,960 $275,921
MI $2,840,535 $946,845 $1,893,690
MN $1,879,950 $626,650 $1,253,300
MO $1,930,233 $643,411 $1,286,822
MS $802,670 $267,557 $535,113
MT $283,550 $94,517 $189,033
NC $2,899,754 $966,585 $1,933,169
ND $237,096 $79,032 $158,064
NE $649,799 $216,600 $433,199
NH $451,654 $150,551 $301,103
NJ $2,937,860 $979,287 $1,958,573
NM $572,119 $190,706 $381,413
NV $1,027,665 $342,555 $685,110
NY $6,078,428 $2,026,143 $4,052,285
OH $3,714,908 $1,238,303 $2,476,605
OK $1,129,637 $376,546 $753,091
OR $1,189,281 $396,427 $792,854
PA $4,010,338 $1,336,779 $2,673,559
PR $601,269 $200,423 $400,846
RI $329,158 $109,719 $219,439
SC $1,352,143 $450,714 $901,429
SD $268,073 $89,358 $178,715
TN $1,967,539 $655,846 $1,311,693
TX $8,297,415 $2,765,805 $5,531,610
UT $870,818 $290,273 $580,545
VA $2,739,420 $913,140 $1,826,280
VI $28,519 $9,506 $19,013
VT $202,352 $67,451 $134,901
WA $2,143,527 $714,509 $1,429,018
WI $1,923,648 $641,216 $1,282,432
WV $488,063 $162,688 $325,375
WY $205,845 $68,615 $137,230
US $99,750,000 $33,250,000 $66,500,000
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