-

 



U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEURA

ISSUE DATE

August 26, 1994

RESCISSIONS

None

EXPIRATION DATE

November 30, 1996

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 43-94

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

MARY ANN WYRSCH
Director
Unemployment Insurance Service

 

SUBJECT

:

Short-time Compensation Study

  1. Purpose. To provide State Employment Security Agencies (SESAs) with information regarding the need for their participation in the newly funded Short-time Compensation (STC) study and to encourage their cooperation with these upcoming solicitations.

  2. References. Unemployment Compensation Amendments of 1992, Section 401; An Evaluation of Short-Time Compensation Programs, Unemployment Insurance Service Occasional Paper 86-4, 1986.

  3. Background. Seventeen State unemployment compensation laws contain provisions for STC programs (also known as work-sharing). The U. S. Department of Labor has contracted to conduct a study that will gather the data and conduct the analyses necessary for the fuller development of the Department's workforce development strategy. It will also provide input to a report to Congress on the implementation of STC as required under Section 401 of the Unemployment Compensation Amendments of 1992.

    STC is an alternative to employee lay-offs, in which designated employees work shorter hours instead of being laid off. These employees are compensated for their lost work time with partial unemployment benefits. STC programs offer benefits to both employers and employees. For employers, STC can reduce work hours while maintaining the existing workforce and avoiding the costs of hiring and training new employees during economic recovery. For employees, STC protects against the financial burden of job loss, preserves job-specific skills and may assist certain workers experiencing impending permanent dislocation by allowing them to participate in retraining or look for a new position while still employed.

    The Department has funded a two year, $550,000 study of STC. The study, which began on July 1, will provide a comprehensive program evaluation. Data will be gathered through a survey of State and regional officials to determine the level of interest in the program, administrative practices and associated costs, and why States have or have not chosen to participate.

    A subset of 4 or 5 States will be requested to provide administrative data on STC and unemployment insurance (UI) claims for a random sample of employers. A survey of these employers will then gather information on why they have chosen to participate or not participate, the extent to which participation has prevented layoffs, and the effect of STC on employment and employee benefits.

  4. Action Required. All 53 States are requested to participate in the telephone survey on STC when contacted by staff of the prime contractor, Berkeley Planning Associates of Oakland, California or the sub-contractor Mathematica Policy Research, Inc. of Princeton, New Jersey. This survey will take place in the summer of 1995.

    In the next few months, 4 or 5 States will be requested to cooperate with the contractors by providing the administrative data needed to draw random samples for the employer surveys. The contractors will be acting as agents of the Department of Labor in receiving and analyzing these data and will be subject to both Federal and State confidentiality requirements. National and/or regional office staff will assist the contractors' in requesting this information.

  5. Inquiries. Direct questions concerning the STC study, to Norman Harvey on 202-219-5922 or Dick Puerzer on 202-219-7196.