Wyoming Department of Workforce Services implements Short-time Compensation to offset reduced work hours

CHEYENNE - The 66th Wyoming State Legislature recently passed House Bill 0009, which created the Short Time Compensation Program. This bill gives Wyoming workers and businesses flexibility during times of economic instability.

"We are pleased to announce that Short Time Compensation is now available," said Holly McKamey Simoni, the Department of Workforce Services' Workforce Programs Administrator. "STC allows businesses to reduce the hours they provide to workers. Those workers then are able to use Unemployment Insurance (UI) benefits to offset the loss of income."

STC is a benefit for both the worker and the employer, as the worker is eligible for a percentage of his or her UI benefit, still earns some income from the job, and retains fringe benefits; and the employer can reduce overhead in order to keep the business from faltering, yet does not have to worry about employees leaving to get new jobs. This prevents businesses from having to find and train new employees when business picks up again.

STC can be used any time an employer experiences a downturn in business. The employer can reduce the hours two or more employees work, thereby saving money on payroll. The employees may file for UI benefits based on the reduction in their weekly income. The employees will receive a percentage of their unrealized wages in UI benefits. The program doesn't replace all the wages lost, but it is intended to help the employees cover expenses during the downturn without having to find a new job.

Using STC to reduce hours and prevent a total business shutdown does affect an employer's UI tax rate, but not to the extent fully laying off employees would.

"We are excited to provide this option to the businesses and workers of Wyoming, even though we hope nobody needs to use it," Simoni said. "In the event it is needed, though, it will be a great help to both employers and employees."

The STC program helps employers

  • Minimize or eliminate the need for layoffs in nearly all types of businesses or industries.
  • Keep trained employees and quickly recover when business conditions improve.
  • Bring back furloughed or laid-off employees at reduced hours as business conditions improve.

With STC, employees whose hours and wages have been reduced can

  • Receive UI benefits.
  • Keep their current job.
  • Avoid financial hardships.

Important Plan Details

  • All approved STC plans are active for one year.
  • STC plans always begin on Sunday. The earliest date to start a new STC plan is the Sunday before the first day you contact the Wyoming Unemployment Insurance Division.
  • STC can be used to cover work loss based on up to 40 hours per week.

To participate, an employer's business must meet all of the following requirements:

  • Be a legally registered business in Wyoming.
  • Have an active Wyoming State Employer Account Number.
  • A minimum of two employees must be affected by a reduction in hours and wages. The employees must also be eligible for unemployment benefits.
  • Hours and wages must be reduced by 10% to 60% of regular hours -- overtime hours are not eligible.
  • Health and retirement benefits must stay the same as before, or they must meet the same standards as other employees who are not participating in STC.
  • The employees' bargaining unit must agree to voluntarily participate and sign the application for STC.
  • Affected work units to be covered by the STC plan, and each participating employee, must be identified by their legal name and Social Security number.
  • Employees must know in advance that you plan to take part in the STC program.
  • Employer must submit to the Wyoming Unemployment Insurance Division an estimated amount of layoffs to be avoided by participating in the STC program.
  • All necessary reports and information are provided to the Wyoming Unemployment Insurance Division.

Restrictions

  • Leased, intermittent, seasonal, or temporary service employees cannot participate.
  • Corporate officers or major stock holders with investment in the company cannot participate.
  • STC cannot be used as a transition to a layoff.

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