The Congressman Urges Michigan Businesses To Learn More
DETROIT- The U.S. Department of Labor has granted the state of Michigan $2,840,535 in federal funding to support implementation and promotion of the new short-time compensation (STC) program.
The STC program, commonly known as "work-sharing," prevents layoffs by allowing employers to reduce employees’ hours as an alternative to layoffs during an economic downturn. Under the STC program, workers affected by reduced hours have their wages supplemented by a percentage of the weekly unemployment compensation that they would have received had they been laid off. The program gives businesses the crucial ability to retain skilled employees at reduced hours during tough economic times, allowing them to simply restore employee hours when demand improves which significantly reduces the high cost to employers of conducting layoffs and re-hiring.
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| U.S. Representative John Conyers, Jr. |
“As an early supporter of work-sharing here in the United States, I am very pleased that Michigan has received federal resources to bolster this important program,” said Rep. John Conyers, who is a founder and chair of the Congressional Full Employment Caucus. “Work-sharing is win for all invested parties: workers remain employed and get to keep their health and retirement benefits, while employers can retain skilled workers that are integral to the success of their businesses. Entire communities benefit when lives are not disrupted unnecessarily by the scourge of unemployment.”
The federal funding resources were made available through the Middle Class Tax Relief and Job Creation Act of 2012, which included language taken directly from the Layoff Prevention Act (H.R. 2421) that was co-sponsored by Rep. Conyers and Rep. Rosa DeLauro (CT-03) in July 2011.
States have until the end of this year to apply for federal resources to implement the STC program. To address this looming deadline, Reps. Conyers and DeLauro again joined forces to co-sponsor H.R. 5583, the Layoff Prevention Extension Act of 2014, which will give states an additional year to make their STC programs eligible for federal support. Both members plan to reintroduce the Layoff Prevention Extension Act in the 114th Congress.
Several U.S. states and countries with STC programs have seen significant economic results. In Rhode Island, work-sharing prevented more than 13,000 layoffs between 2007 and 2010 – the height of the Great Recession. Countries such as Germany and Japan have reduced levels of unemployment by as much as 1% through work-sharing programs.
“Short-time compensation is something that all states should have an opportunity to have in place long before any future economic downturns occur,” added Rep. Conyers. “It is critical that Congress pass the Layoff Prevention Extension Act immediately to ensure that all states have adequate time to complete their state-level deliberation and decision-making processes and ultimately reap the benefits of work-sharing.”
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