Transcript Short-time Compensation Also known as Work Sharing

Short-time Compensation (STC)
… an alternative to full layoffs.
Presented by Debbie Hoffman
Florida Agency for Workforce Innovation
Unemployment Compensation
Short-time compensation (STC) (also known as work
sharing in some states) provides employers with an
alternative to layoffs by allowing them to make work
reductions to a larger group of workers.
Under STC workers whose hours are reduced
receive pro-rated unemployment insurance benefits
for partial work. Workers usually receive no UI
benefit for such partial layoffs in the absence of an
STC program.
BACKGROUND
In 1982 federal legislation was enacted which
encouraged states to adopt STC and mandated the
Secretary of Labor to develop model legislative
language for states to use when adopting STC
programs. In July 1983 this language was made
available to states.
Florida adopted the STC
program in 1983.
STC PROGRAM BENEFITS
•
•
•
•
•
•
•
•
•
Offer flexibility in adjusting employment to demand
Allow for retention of skilled employees
Prevent disruption in business/production
Reduce costs of reorganization necessitated by
layoffs
Reduce costs of training
Reduce costs of hiring/re-hiring
Employ more employees
Provide long term productivity gains
Lower wages paid
Other potential effects of STC utilization:
• Allow employees to retain fringe benefits
• Maintain employee morale
• Prevent economic necessity for employees
to seek new employment
• Affect employees’ quality of life
• Maximization of the number of contributing
members of society
• Avoid placing disproportionate share of the
effects of economic down turn on individual
workers who would otherwise be laid off
• Allow partial benefits to individuals who would
otherwise not qualify under a States’ regular
unemployment compensation partial payment
provisions
• Stimulate economy with revenue resulting from the
pro-rated income the STC participant receives
• May reduce the frequency of mass layoffs and the
negative effect of such layoffs upon the communities
and labor markets in which they occur.
• Allow employee to continue to develop skills in their
chosen occupation
Adopting STC
For a state to choose to adopt STC, the program
must first be proposed in the state legislature. Key
stakeholders:
•
•
•
•
State Governor
Legislative Representatives
Employer Representatives
Labor Groups
Adoption Rules and Conditions
Each
state
determines
the
administrative
procedures, rules and conditions for STC
participation. These include:
•
•
•
•
•
•
•
Exclusions
Minimum number of participants
Percentage employees hours can be reduced
Require employer maintain work benefits
Duration employee can receive STC
Worker attachment requirements
Availability for all work hours STC employer has
available
• Individuals who must sign off on plan
• Submit plan application
• Participating workers covered by a collective
bargaining agreement require the consent of the
bargaining representative
• Special UI tax (if any) provisions for participating
employers
• Employee applications submitted
• Weekly claims are filed
Marketing STC After Adoption
•
•
•
•
•
•
•
Media Publicity
Flyers
Regular Articles
Pamphlets or CD’s
Web site
Training for SESA
Include as part of response to WARN notices
Partial Unemployment Benefits
Under regular partial benefit provisions employees
can only collect partial unemployment when their
gross earnings in a given week is below a fixed
dollar amount. The maximum amount of allowable
earnings for partial benefits vary by state.
Partial benefits differ from STC in that eligibility for
partial benefits is contingent on the employee’s
earnings. Under the STC program earnings are not
a condition of eligibility. STC does, however, put
parameters on the allowable work week reduction.
MINIMUM AND MAXIMUM HOURS FLORIDA STC
40
39
38
37
36
35
34
33
32
24
24
23
23
22
21
21
20
20
36
35
34
33
32
31
30
29
28
Calculation Chart for Employee whose Normal
Hours before Reduction were 40
40-36 = 4 ÷ 40 = 10%
40-35 = 5 ÷ 40 = 12.5%
40-34 = 6 ÷ 40 = 15%
40-33 = 7 ÷ 40 =17.5%
40-32 = 8 ÷ 40 = 20%
40-31 = 9 ÷ 40 = 22.5%
40-30 = 10 ÷ 40 = 25%
40-29 = 11 ÷ 40 = 27.5%
40-28 = 12 ÷ 40 = 30%
40-27 = 13 ÷ 40 = 32.5%
40-26 = 14 ÷ 40 = 35%
40-25 = 15 ÷ 40 = 37.5%
40-24 = 16 ÷ 40 = 40%
EXAMPLE: NORMAL
HOURS BEFORE
REDUCTION WAS 35
HOURS
35-30 = 5 ÷ 35 = .142857
Example
Florida’s current maximum weekly benefit amount
(WBA) is $275. No partial payment is due if
earnings exceed WBA. Employee who’s WBA if
totally unemployed would be $275 and employer
reduces their hours to 24 per week at a hourly
amount of $15.00 would earn $360 which is over the
maximum WBA and would not receive partial
benefits. Under FL STC this employee would
receive partial payment of $110 (40% of WBA).
FLORIDA STC STATISTICS
Plans Approved
200
180
160
140
120
100
80
60
40
20
0
3.5
months
12
months
12
months
12
months
12
months
12
months
12
months
12
months
Plans Approved
2002 2003 2004 2005 2006 2007 2008 2009
Potential Participants
7000
6000
5000
4000
3000
2000
1000
0
12
months
12
months
12
months
12
months
12
months
12
months
12
months
3.5
months
Potential Participants
2002 2003 2004 2005 2006 2007 2008 2009
Oth
Services
Accomod
Arts
Real
Estate
Health
Care
Fin
Info
Transp
Wholesale
Trade
Retail
Trade
Mfg
Const
Util
Mining
Agr
300
250
200
150
Series1
100
50
0
Industry Code Totals for the period of 2002 through March 15, 2009
RESOURCES
Florida STC Law:
http://199.44.254.194/Statutes/index.cfm?App_mode=Displa
y_Statute&Search_String=&URL=Ch0443/SEC1116.HTM&
Title=->2004->Ch0443->Section%201116
Department of Labor Evaluation of STC Final Report:
http://wdr.doleta.gov/owsdrr/97-3/97-3.pdf
Florida’s STC Employer Brochure:
http://www.floridajobs.org/unemployment/uc_prog_stc.html
Florida’s STC Employee Brochure:
http://www.floridajobs.org/unemployment/uc_prog_stc_ee.h
tml
Unemployment Insurance Program Letter 45-92
http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2383
http://wdr.doleta.gov/directives/attach/UIPL/uipl1992/uipl_45
92.cfm#2