News Release

$2.7M grant awarded to Texas to expand and enhanceits short-time compensation layoff prevention program

WASHINGTON — The U.S. Department of Labor today announced the award of $2,765,805 to the state of Texas for enhancements to the state’s short-time compensation program, a layoff prevention program also known as "work-sharing."

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 programs help businesses and employees maintain a level of economic security during volatile business cycles," said U.S. Secretary of Labor Thomas E. Perez. "Texas officials are taking proactive steps to prepare for future economic needs by accepting this federal funding, and I encourage all states to evaluate whether they can benefit from this federal resource."

The 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.

For more information about starting an STC program and how states can take advantage of federal financial incentives, visit


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