The Department of Labor (DOL) recently issued new guidance to
states on the Short-Time Compensation (STC) program provisions
(also known as "work sharing" or "shared work")
in the Coronavirus Aid, Relief, and Economic Security Act of 2020
(CARES Act). This opinion letter (UIPL 21-20) helps clarify the 100% federal
reimbursement of certain state STC payments.
Internal Revenue Code section 3306(v) sets broad parameters for
STC programs, with states accorded some flexibility in establishing
them. About half the states currently have STC programs,
with most of them permitting employers to reduce hours and wages
between 10 and 60%. Section 2108 of the CARES Act provides for
temporary 100% federal financing of STC payments in states with STC
programs. Section 2109 permits a state that does not have an STC
program to operate a temporary federal program, which provides
federal benefits as opposed to state-funded benefits. Section 2110
of the CARES Act also provides $110
