II 

116TH CONGRESS 

2D SESSION S. 4303 

To improve State short-time compensation programs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 23, 2020 

Mr. REED introduced the following bill; which was read twice and referred to 

the Committee on Finance 

A BILL 

To improve State short-time compensation programs, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Workforce Retention 

5 Act of 2020’’. 

6 SEC. 2. EXTENSION OF TEMPORARY FINANCING OF SHORT7 TIME COMPENSATION PROGRAMS. 

8 (a) STATES WITH PROGRAMS IN LAW.—Section 

9 2108(b)(2) of the Relief for Workers Affected by 

10 Coronavirus Act (contained in subtitle A of title II of divi11 sion A of the CARES Act (Public Law 116–136)) is 


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1 amended by striking ‘‘December 31, 2020’’ and inserting 

2 ‘‘December 31, 2022’’. 

3 (b) STATES WITH SHORT-TIME COMPENSATION

4 AGREEMENTS.—Section 2109(d)(2) of the Relief for 

5 Workers Affected by Coronavirus Act (contained in sub6 title A of title II of division A of the CARES Act (Public 

7 Law 116–136)) is amended by striking ‘‘December 31, 

8 2020’’ and inserting ‘‘December 31, 2022’’. 

9 SEC. 3. IMPROVEMENTS TO SHORT-TIME COMPENSATION 

10 PROGRAMS. 

11 (a) STATES WITH PROGRAMS IN LAW.—Section 

12 2108(a) of the Relief for Workers Affected by Coronavirus 

13 Act (contained in subtitle A of title II of division A of 

14 the CARES Act (Public Law 116–136)) is amended by 

15 striking paragraph (3) and inserting the following: 

16 ‘‘(3) LIMITATIONS ON PAYMENTS.—No pay17 ments shall be made to a State under this section 

18 for short-time compensation paid to an individual by 

19 the State during a benefit year in excess of 26 times 

20 the amount of regular compensation (including de21 pendents’ allowances) under the State law payable to 

22 such individual for a week of total unemployment.’’. 

23 (b) STATES WITH SHORT-TIME COMPENSATION

24 AGREEMENTS.—Section 2109 of the Relief for Workers 

25 Affected by Coronavirus Act (contained in subtitle A of 


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1 title II of division A of the CARES Act (Public Law 116– 

2 136)) is amended— 

3 (1) in subsection (b)— 

4 (A) by striking paragraph (2) and insert5 ing the following: 

6 ‘‘(2) LIMITATIONS ON PLANS.—A short-time 

7 compensation plan approved by a State shall not 

8 permit the payment of short-time compensation to 

9 an individual by the State during a benefit year in 

10 excess of 26 times the amount of regular compensa11 tion (including dependents’ allowances) under the 

12 State law payable to such individual for a week of 

13 total unemployment.’’; and 

14 (B) by striking paragraph (3); and 

15 (2) in subsection (c)(1)(A), by striking ‘‘one16 half’’ and inserting ‘‘100 percent’’. 

17 SEC. 4. ENACTMENT OF PERMANENT SHORT-TIME COM18 PENSATION PROGRAMS. 

19 (a) REQUIREMENT.— 

20 (1) IN GENERAL.—Section 3304(a) of the In21 ternal Revenue Code of 1986 (relating to approval 

22 of State unemployment compensation laws) is 

23 amended— 


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1 (A) in paragraph (4)(E), by inserting ‘‘, as 

2 required under paragraph (19)’’ after 

3 ‘‘3306(v))’’; 

4 (B) in paragraph (18), by striking ‘‘and’’ 

5 at the end; 

6 (C) by redesignating paragraph (19) as 

7 paragraph (20); and 

8 (D) by inserting after paragraph (18) the 

9 following new paragraph: 

10 ‘‘(19) payment of short-time compensation is 

11 made under a short-time compensation program (as 

12 defined in section 3306(v)) under the State law; 

13 and’’. 

14 (2) CONFORMING AMENDMENT.—Section 

15 303(a)(5) of the Social Security Act (42 U.S.C. 

16 503(a)(5)), is amended, in the fifth proviso, by in17 serting ‘‘, as required under section 3304(a)(19) of 

18 such Code’’ after ‘‘1986)’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 subsection (a) shall apply to weeks of unemployment be21 ginning on or after the earlier of— 

22 (1) the date the State changes its statutes, reg23 ulations, or policies in order to comply with such 

24 amendments; or 

25 (2) January 1, 2023. 


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1 SEC. 5. REQUIREMENTS FOR SHORT-TIME COMPENSATION 

2 PROGRAMS. 

3 (a) REQUIREMENT.— 

4 (1) IN GENERAL.—Section 3304 of the Internal 

5 Revenue Code of 1986 (relating to approval of State 

6 unemployment compensation laws), as amended by 

7 section 3, is amended— 

8 (A) in subsection (a)— 

9 (i) in paragraph (19)— 

10 (I) by inserting ‘‘subject to para11 graph (20),’’ before ‘‘payment of 

12 short-time compensation’’; and 

13 (II) by striking ‘‘and’’ at the end; 

14 (ii) by redesignating paragraph (20) 

15 as paragraph (21); and 

16 (iii) by inserting after paragraph (19) 

17 the following new paragraph: 

18 ‘‘(20) subject to subsection (g), with respect to 

19 the short-time compensation program requirement 

20 under paragraph (19), the State law— 

21 ‘‘(A) does not prohibit any employer, other 

22 than an employer that is delinquent in the pay23 ment of unemployment insurance taxes, from 

24 participating in such program solely based on 

25 the employer’s experience rating; 


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1 ‘‘(B) allows any employer with four or 

2 more employees to participate in such program; 

3 ‘‘(C) in the case where the State has con4 tinued weakness in economic demand affecting 

5 an employer, provides for approval of such em6 ployer’s short-time compensation for up to 52 

7 weeks; 

8 ‘‘(D) prohibits a State from relying solely 

9 on an employer’s history of recent layoffs as the 

10 basis for any disapproval of such employer’s 

11 short-time compensation plan; 

12 ‘‘(E) does not prohibit submission or con13 sideration of an employer’s short-time com14 pensation plan or any requested extension of 

15 such plan less frequently than once in a 2-year 

16 period; 

17 ‘‘(F) requires an employer with an ap18 proved short-time compensation plan to certify 

19 on a weekly basis the hour reduction for any 

20 employees covered under such plan without re21 gard for earnings from an employer other than 

22 the employer covered under such plan, elimi23 nating any requirement that such employees in24 dividually certify any hour reduction each week; 

25 and 


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1 ‘‘(G) requires a State to increase the max2 imum percentage of workweek reduction to 

3 qualify for a short-time compensation program 

4 from 60 percent to 80 percent; and’’; and 

5 (B) by adding at the end the following new 

6 subsection: 

7 ‘‘(g) AUTHORITY TO SUNSET.—Any State that en8 acts a State law providing for the payment of short-time 

9 compensation under a short-time compensation program 

10 under paragraph (19) of subsection (a) may include a pro11 vision in such law that permits the requirements under 

12 paragraph (20) of such subsection (a) to expire after De13 cember 31, 2027.’’. 

14 (2) CONFORMING AMENDMENT.—Section 

15 3306(v)(3) of the Internal Revenue Code of 1986 is 

16 amended by striking ‘‘the percentage, if any, that is 

17 determined by the State to be appropriate (but in no 

18 case more than 60 percent),’’ and inserting ‘‘80 per19 cent’’. 

20 (3) EFFECTIVE DATE.—The amendments made 

21 by subsection (a) shall apply to weeks of unemploy22 ment beginning on or after the earlier of— 

23 (A) the date the State changes its statutes, 

24 regulations, or policies in order to comply with 

25 such amendments; or 


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1 (B) January 1, 2023. 

2 (b) PERMANENT FINANCING FOR SHORT-TIME COM3 PENSATION PROGRAMS.—Title IX of the Social Security 

4 Act (42 U.S.C. 1101 et seq.) is amended by adding at 

5 the end the following: 

6 ‘‘SEC. 912. PERMANENT FINANCING FOR SHORT-TIME COM7 PENSATION PROGRAMS. 

8 ‘‘Beginning on January 1, 2023, there shall be paid 

9 to each State with a State law providing for the payment 

10 of short-time compensation under a permanent short-time 

11 compensation program that meets the requirements for 

12 such a program under section 3306(v) and paragraph (20) 

13 of section 3304(a) of the Internal Revenue Code of 1986, 

14 an amount equal to— 

15 ‘‘(1) 100 percent of the amount of short-time 

16 compensation paid to individuals by the State pursu17 ant to such program; and 

18 ‘‘(2) any additional administrative expenses in19 curred by the State by reason of such program (as 

20 determined by the Secretary).’’. 

21 SEC. 6. STANDARD FOR TIMELINESS. 

22 Not later than 90 days after the date of enactment 

23 of this Act, the Secretary of Labor shall establish a stand24 ard for timeliness for State determinations of approval of 

25 short-time compensation plans under a short-time comVerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303

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1 pensation program (as defined in section 3306(v) of the 

2 Internal Revenue Code of 1986). 

3 SEC. 7. IMPROVED ADMINISTRATION. 

4 (a) ADMINISTRATIVE IMPROVEMENTS.—Section 303 

5 of the Social Security Act (42 U.S.C. 503) is amended 

6 by adding at the end the following: 

7 ‘‘(n) ANNUAL REPORTS ON SHORT-TIME COMPENSA8 TION PROGRAMS.— 

9 ‘‘(1) IN GENERAL.—The State agency charged 

10 with the administration of the State law shall— 

11 ‘‘(A) provide an annual report to the Sec12 retary of Labor on short-time compensation 

13 program activity within their State, including 

14 information regarding— 

15 ‘‘(i) the number of approved employer 

16 short-time compensation plans; 

17 ‘‘(ii) the size and industry of any cov18 ered employer; 

19 ‘‘(iii) the number of employees covered 

20 by any such approved plan; 

21 ‘‘(iv) the number of layoffs averted as 

22 a result of short-time compensation pro23 gram utilization; and 


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1 ‘‘(v) the gender, race, ethnicity, and 

2 age of any employee covered by any such 

3 approved plan; and 

4 ‘‘(B) review economic data, layoff histories, 

5 and industry trends to identify any employer 

6 who is at risk for future layoffs and conduct 

7 targeted outreach and education on any short8 time compensation program offered by the 

9 State. 

10 ‘‘(2) ENFORCEMENT.—Whenever the Secretary 

11 of Labor, after reasonable notice and opportunity for 

12 hearing to the State agency charged with the admin13 istration of the State law, finds that there is a fail14 ure to comply substantially with the requirements of 

15 paragraph (1), the Secretary of Labor shall notify 

16 such State agency that further payments will not be 

17 made to the State until the Secretary of Labor is 

18 satisfied that there is no longer any such failure. 

19 Until the Secretary of Labor is so satisfied, such 

20 Secretary shall make no further certification to the 

21 Secretary of the Treasury with respect to such 

22 State. 

23 ‘‘(3) FUNDING.—There are appropriated, out of 

24 moneys in the Treasury not otherwise appropriated, 

25 to the Secretary of Labor, $20,000,000 to carry out 


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1 this subsection. Amounts appropriated under the 

2 preceding sentence shall remain available until ex3 pended.’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 subsection (a) shall apply to weeks of unemployment be6 ginning on or after the earlier of— 

7 (1) the date the State changes its statutes, reg8 ulations, or policies in order to comply with such 

9 amendments; or 

10 (2) January 1, 2023. 

11 SEC. 8. GRACE PERIOD FOR FULL FINANCING OF SHORT12 TIME COMPENSATION PROGRAMS. 

13 Section 2108(c) of the Relief for Workers Affected 

14 by Coronavirus Act (contained in subtitle A of title II of 

15 division A of the CARES Act (Public Law 116–136)) is 

16 amended by striking ‘‘shall be eligible’’ and all that follows 

17 through the end and inserting the following: 

18 ‘‘shall be eligible— 

19 ‘‘(1) for payments under subsection (a) for 

20 weeks of unemployment beginning after the effective 

21 date of such enactment; and 

22 ‘‘(2) for an additional payment equal to the 

23 total amount of payments for which the State is eli24 gible pursuant to an agreement under section 2109 


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1 for weeks of unemployment before such effective 

2 date.’’. 

3 SEC. 9. DEPARTMENT OF LABOR STUDY AND REPORT ON 

4 SHORT-TIME COMPENSATION PROGRAMS. 

5 (a) STUDY.—The Secretary of Labor (in this section 

6 referred to as the ‘‘Secretary’’) shall conduct a study on 

7 State short-time compensation programs (as defined in 

8 section 3306(v) of the Internal Revenue Code of 1986). 

9 Such study shall include an analysis of— 

10 (1) the operation and results of the short-time 

11 compensation programs contained in the Relief for 

12 Workers Affected by Coronavirus Act (contained in 

13 subtitle A of title II of division A of the CARES Act 

14 (Public Law 116–136)); 

15 (2) the extent to which such short-time com16 pensation programs averted layoffs; and 

17 (3) any short-time compensation program, or 

18 the equivalent, used in Organisation for Economic 

19 Co-operation and Development member countries 

20 during the COVID–19 pandemic, with the aim of 

21 identifying improvements to the short-time com22 pensation programs used in the United States. 

23 (b) REPORT.—Not later than January 1, 2025, the 

24 Secretary shall submit to Congress a report containing the 

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1 gether with recommendations for any such legislation or 

2 administrative action as the Secretary determines appro3 priate. 

4 (c) FUNDING.—There are appropriated, out of mon5 eys in the Treasury not otherwise appropriated, to the 

6 Secretary of Labor, $750,000 to carry out this section. 

7 Amounts appropriated under the preceding sentence shall 

8 remain available until expended. 

9 SEC. 10. INCREASED FUNDING FOR GRANTS FOR SHORT10 TIME COMPENSATION PROGRAMS. 

11 Section 2110(g) of the Relief for Workers Affected 

12 by Coronavirus Act (contained in subtitle A of title II of 

13 division A of the CARES Act (Public Law 116–136)) is 

14 amended by striking ‘‘100,000,000’’ and inserting 

15 ‘‘250,000,000’’. 

16 SEC. 11. SHORT-TIME COMPENSATION ENROLLMENT IN17 CENTIVE PAYMENTS. 

18 Section 903 of the Social Security Act (42 U.S.C. 

19 1103) is amended by adding at the end the following: 

20 ‘‘(j) SHORT-TIME COMPENSATION ENROLLMENT

21 PAYMENTS.— 

22 ‘‘(1) IN GENERAL.—For each of the fiscal years 

23 2021 and 2022, the Secretary of Labor shall provide 

24 for the making of short-time compensation enroll25 ment incentive payments (in this subsection referred 


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1 to as ‘incentive payments’) to the accounts of the 

2 States in the Unemployment Trust Fund (as estab3 lished by section 904(a)), by transfer from amounts 

4 in the Federal unemployment account (as estab5 lished by section 905(g)), in accordance with suc6 ceeding provisions of this subsection. 

7 ‘‘(2) CERTIFICATION.— 

8 ‘‘(A) INITIAL BENCHMARK.—The Sec9 retary of Labor shall certify an incentive pay10 ment to any State that increases the number of 

11 short-time compensation claims as a percentage 

12 of all unemployment insurance weekly claims of 

13 such State to an average of not less than 5 per14 cent for a 3-month period. 

15 ‘‘(B) ADDITIONAL BENCHMARKS.—The 

16 Secretary may create additional benchmarks, 

17 upon which to certify an incentive payment, for 

18 any State that increases the number of short19 time compensation claims as a percentage of all 

20 unemployment insurance weekly claims of such 

21 State for a 3-month period. 

22 ‘‘(3) FUNDING.—There are appropriated, out of 

23 moneys in the Treasury not otherwise appropriated, 

24 to the Federal unemployment account, $100,000,000 

25 to carry out this subsection. Amounts appropriated 


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1 under the preceding sentence shall remain available 

2 through fiscal year 2022.’’. 

Æ 


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