On July 1, the U.S. Department of Labor (DOL) announced its renewed dedication to promoting Short-Time Compensation (STC) programs across the country and awarded grants to several states to assist with their economic recovery in the wake of the COVID-19 crisis. The DOL announced that the Illinois Department of Employment Security (IDES) would receive just over $4 million to “support the state’s business community as it continues its economic recovery” through STC programs.
STC, also known as work-sharing, allows employers to cut employees’ work hours without laying them off by providing partial unemployment benefits to employees with reduced hours. While several other states have had work-sharing programs in place for some time, this grant from the DOL will help Illinois implement an STC scheme for the first time. Illinois passed legislation in late 2014 authorizing IDES to implement an STC program, and this new grant provides further incentive to continue that process.
Once IDES develops the requisite rules and procedures to support an STC program in Illinois, the onus will be on employers, not employees, to seek opportunities to participate in the program. Guidance from the DOL and the 2014 Illinois statute requires employers to submit a proposed STC plan to IDES to be considered for the program. Notably, the components of the application shall include, among other requirements, the following details:
- The employer’s unemployment insurance information;
- Proposed plans for notifying employees of work-sharing opportunities; and
- A certification by the employer that it will not hire will hire additional employees to replace or compensate for the workers with reduced hours.
Work sharing may provide some economic relief to Illinois businesses without necessitating harmful layoffs or uncompensated work reductions. The Workplace Report will provide necessary updates as IDES considers and approves procedural and regulatory provisions related to STC in response to the new grant funding.