What is Short-Time Compensation

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  • Short-Time Compensation (STC) permits pro-rated Reemployment Assistance (RA) benefits to employees whose work hours and earnings are reduced as part of a STC plan to avoid total layoff of some employees.

STC Plan

  • Employers submit their STC plan to DEO for approval.
  • STC is only available if the normal weekly hours of work for individuals in the affected unit are reduced by at least 10 percent and by not more than 40 percent.
  • The plan does not serve as a subsidy to seasonal employers during the off-season or as a subsidy to employers who traditionally use part-time employees.
  • An Individual may not be paid Short-Time Compensation benefits for more than 26 weeks in any benefit year.

Eligibility Requirements (for Employees)

  • Only full-time permanent (not part time or seasonal) employees with a set number of hours worked each week (excluding overtime) may participate in the STC program.
  • Employees must work at least 60%, but no more than 90% of their normal work hours, to qualify for STC benefits.
  • Employees must be eligible for RA benefits.

Employer Charges

  • STC benefits are charged to the employment record of the employer as they would be charged to any employer not enrolled in a STC plan.
  • The maximum tax rate for employers participating in STC is 6.4 percent (Note: 5.4 percent is the highest possible tax rate that may be assessed for non-STC employers).


  • Employees are spared the hardships of full unemployment, and employers retain employees who can resume high production levels when business conditions improve.
  • Employers avoid the expense of recruiting, hiring, and training new workers when business conditions improve.
  • Affected employees may continue to work at reduced levels with an opportunity to find other employment before the expected layoff.

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