Short-Time Compensation Programs as a COVID-19 Response and Recovery Strategy

Short-Time Compensation (STC), also known as work sharing or shared-work programs, are an alternative to layoffs for employers experiencing a reduction in business activities and allows those employees facing a reduction in wages to collect a percentage of their unemployment compensation (UC) benefits to replace a portion of their lost wages. STC preserves employees’ jobs and employers’ skilled workforces by allowing employers to reduce work hours for some employees rather than laying them off. Research has demonstrated that states that utilized STC programs during the Great Recession saved tens of thousands of jobs that otherwise would have been lost.

This memo provides governors and state officials with an overview of the Short-Time Compensation (STC) program and opportunities for developing, promoting, and expanding state STC programs during the COVID-19 crisis.

All NGA coronavirus memos can be found here, or visit Coronavirus: What You Need To Know for current information on the status of COVID-19 In The United States, a list of actions states/territories have taken to address both the public health and economic impacts, and policy resources.