Ohio receives $3.7M grant from US Labor Department to implement and promote its new short-time compensation layoff prevention program

STC programs allow employers to reduce work hours for a group of employees as an alternative to layoffs during tough economic times. With STC, workers affected by reduced hours have their lowered wages supplemented by a percentage of the weekly unemployment compensation that would have been available to them had they been laid off entirely. This is a win-win program: employees keep their jobs — and benefits, such as employer-based retirement and health insurance — while employers maintain their skilled workforce and avoid having to hire and train new workers when business activity increases. This approach eases the strain on local economies, which acutely feel the impact of layoffs.

"Short-time compensation is an innovative solution to a foreseeable problem that helps businesses and employees maintain a level of economic security during difficult economic periods," said U.S. Secretary of Labor Thomas E. Perez. "I commend Ohio for taking advantage of these federal incentives, and I encourage all states to evaluate whether they can benefit from the available federal funds."

Of the funds awarded, Ohio will allocate $1,238,303 to implement a new STC program, while the remaining $2,476,605 will go toward educating the public about the advantages of incorporating an STC program and increasing enrollment of employers into the program.

This funding was made available through the Middle Class Tax Relief and Job Creation Act of 2012, which gave the secretary of labor authority to award grants to states to implement or improve an STC program, as well as promote the program and enroll employers. States with an STC program may also be eligible to receive reimbursement from the federal government for STC benefits paid.