I 
111TH CONGRESS 
1ST SESSION H. R. 4135 
To keep Americans working by strengthening and expanding short-time 
compensation programs that provide employers with an alternative to layoffs. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 19, 2009 
Ms. DELAURO (for herself, Mr. HARE, Mr. HASTINGS of Florida, Mr. TONKO, 
Ms. NORTON, Ms. WOOLSEY, Ms. LINDA T. SA´NCHEZ of California, Mr. 
NADLER of New York, Mr. CAPUANO, and Ms. JACKSON-LEE of Texas) 
introduced the following bill; which was referred to the Committee on 
Ways and Means 
A BILL 
To keep Americans working by strengthening and expanding 
short-time compensation programs that provide employ-
ers with an alternative to layoffs. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Keep Americans Work-
ing Act’’. 
SEC. 2. PURPOSE. 
The purpose of this Act is to keep Americans working 
by strengthening and expanding short-time compensation 
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programs that provide employers with an alternative to 
layoffs. 
SEC. 3. TREATMENT OF SHORT-TIME COMPENSATION PRO-
GRAMS. 
(a) IN GENERAL.—Section 3306 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(v) SHORT-TIME COMPENSATION PROGRAM.—For 
purposes of this chapter, the term ‘short-time compensa-
tion program’ means a program under which— 
‘‘(1) the participation of an employer is vol-
untary; 
‘‘(2) an employer reduces the number of hours 
worked by employees through certifying that such 
reductions are in lieu of temporary layoffs; 
‘‘(3) such employees whose workweeks have 
been reduced by at least 10 percent are eligible for 
unemployment compensation; 
‘‘(4) the amount of unemployment compensa-
tion payable to any such employee is a pro rata por-
tion of the unemployment compensation which would 
be payable to the employee if such employee were to-
tally unemployed; 
‘‘(5) such employees are not expected to meet 
the availability for work or work search test require-
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ments while collecting short-time compensation bene-
fits, but are required to be available for their normal 
workweek; 
‘‘(6) eligible employees may participate in an 
employer-sponsored training program to enhance job 
skills if such program has been approved by the 
State agency; 
‘‘(7) beginning on the date which is 2 years 
after the date of enactment of this subsection, the 
State agency shall require an employer to certify 
that continuation of health benefits and retirement 
benefits under a defined benefit pension plan (as de-
fined in section 3(35) of the Employee Retirement 
Income Security Act of 1974) is not affected by par-
ticipation in the program; 
‘‘(8) the State agency shall require an employer 
(or an employer’s association which is party to a col-
lective bargaining agreement) to submit a written 
plan describing the manner in which the require-
ments of this subsection will be implemented and 
containing such other information as the Secretary 
of Labor determines is appropriate; 
‘‘(9) in the case of employees represented by a 
union, the appropriate official of the union has 
agreed to the terms of the employer’s written plan 
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and implementation is consistent with employer obli-
gations under the National Labor Relations Act; and 
‘‘(10) the program meets such other require-
ments as the Secretary of Labor determines appro-
priate.’’. 
(b) ASSISTANCE AND GUIDANCE IN IMPLEMENTING 
PROGRAMS.— 
(1) ASSISTANCE AND GUIDANCE.— 
(A) IN
GENERAL.—In order to assist 
States in establishing, qualifying, and imple-
menting short-time compensation programs, as 
defined in section 3306(v) of the Internal Rev-
enue Code of 1986 (as added by subsection 
(a)), the Secretary of Labor (in this section re-
ferred to as the ‘‘Secretary’’) shall— 
(i) develop model legislative language 
which may be used by States in developing 
and enacting short-time compensation pro-
grams and shall periodically review and re-
vise such model legislative language; 
(ii) provide technical assistance and 
guidance in developing, enacting, and im-
plementing such programs; 
(iii) establish biannual reporting re-
quirements for States, including number of 
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averted layoffs, number of participating 
companies and workers, and retention of 
employees following participation; and 
(iv) award start-up grants to State 
agencies under subparagraph (B). 
(B) GRANTS.— 
(i) IN GENERAL.—The Secretary shall 
award start-up grants to State agencies 
that apply not later than September 30, 
2010, in States that enact short-time com-
pensation programs after the date of en-
actment of this Act for the purpose of cre-
ating such programs. The amount of such 
grants shall be awarded depending on the 
costs of implementing such programs. 
(ii) ELIGIBILITY.—In order to receive 
a grant under clause (i) a State agency 
shall meet requirements established by the 
Secretary, including any reporting require-
ments under clause (iii). Each State agen-
cy shall be eligible to receive not more than 
one such grant. 
(iii) REPORTING.—The Secretary may 
establish reporting requirements for State 
agencies receiving a grant under clause (i) 
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in order to provide oversight of grant 
funds used by States for the creation of 
short-time compensation programs. 
(iv) FUNDING.—There are appro-
priated, out of any moneys in the Treasury 
not otherwise appropriated, to the Sec-
retary, such sums as the Secretary certifies 
as necessary for the period of fiscal years 
2010 and 2011 to carry out this subpara-
graph. 
(2) TIMEFRAME.—The initial model legislative 
language referred to in paragraph (1)(A) shall be 
developed not later than 60 days after the date of 
enactment of this Act. 
(c) REPORTS.— 
(1) INITIAL REPORT.—Not later than 4 years 
after the date of enactment of this Act, the Sec-
retary shall submit to Congress and to the President 
a report or reports on the implementation of this 
section. Such report or reports shall include— 
(A) a study of short-time compensation 
programs; 
(B) an analysis of the significant impedi-
ments to State enactment and creation of such 
programs; and 
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(C) such recommendations as the Sec-
retary determines appropriate. 
(2) SUBSEQUENT REPORTS.—After the submis-
sion of the report under paragraph (1), the Sec-
retary may submit such additional reports on the 
implementation of short-time compensation pro-
grams as the Secretary deems appropriate. 
(3) FUNDING.—There are appropriated, out of 
any moneys in the Treasury not otherwise appro-
priated, to the Secretary, $1,500,000 to carry out 
this subsection, to remain available without fiscal 
year limitation. 
(d) CONFORMING AMENDMENTS.— 
(1) INTERNAL REVENUE CODE OF 1986.— 
(A) 
Subparagraph 
(E) 
of 
section 
3304(a)(4) of the Internal Revenue Code of 
1986 is amended to read as follows: 
‘‘(E) amounts may be withdrawn for the 
payment of short-time compensation under a 
short-time compensation program (as defined in 
section 3306(v));’’. 
(B) Subsection (f) of section 3306 of the 
Internal Revenue Code of 1986 is amended— 
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(i) by striking paragraph (5) (relating 
to short-term compensation) and inserting 
the following new paragraph: 
‘‘(5) amounts may be withdrawn for the pay-
ment of short-time compensation under a short-time 
compensation program (as defined in subsection 
(v));’’, and 
(ii) by redesignating paragraph (5) 
(relating to self-employment assistance 
program) as paragraph (6). 
(2) SOCIAL SECURITY ACT.—Section 303(a)(5) 
of the Social Security Act is amended by striking 
‘‘the payment of short-time compensation under a 
plan approved by the Secretary of Labor’’ and in-
serting ‘‘the payment of short-time compensation 
under a short-time compensation program (as de-
fined in section 3306(v) of the Internal Revenue 
Code of 1986)’’. 
(3) REPEAL.—Subsections (b) through (d) of 
section 401 of the Unemployment Compensation 
Amendments of 1992 (26 U.S.C. 3304 note) are re-
pealed. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of enactment of 
this Act. 
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SEC. 4. TEMPORARY FINANCING OF CERTAIN SHORT-TIME 
COMPENSATION PROGRAMS. 
(a) PAYMENTS TO STATES WITH CERTIFIED PRO-
GRAMS.— 
(1) IN GENERAL.—Not later than 30 days after 
the date of enactment of this Act, the Secretary 
shall establish a program under which the Secretary 
shall make payments to any State unemployment 
trust fund to be used for the payment of unemploy-
ment compensation if the Secretary approves an ap-
plication for certification submitted under paragraph 
(3) for such State to operate a short-time compensa-
tion program (as defined in section 3306(v) of the 
Internal Revenue Code of 1986 (as added by section 
3(a))) which requires the maintenance of health and 
retirement employee benefits as described in para-
graph (7) of such section 3306(v), notwithstanding 
the otherwise effective date of such requirement. 
(2) FULL REIMBURSEMENT.—Subject to sub-
section (d), the payment to a State under paragraph 
(1) shall be an amount equal to 100 percent of the 
total amount of benefits paid to individuals by the 
State pursuant to the short-time compensation pro-
gram during the period— 
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(A) beginning on the date a certification is 
issued by the Secretary with respect to such 
program; and 
(B) ending on September 30, 2011. 
(3) CERTIFICATION REQUIREMENTS.— 
(A) IN GENERAL.—Any State seeking full 
reimbursement under this subsection shall sub-
mit an application for certification at such time, 
in such manner, and complete with such infor-
mation as the Secretary may require (whether 
by regulation or otherwise), including informa-
tion relating to compliance with the require-
ments of paragraph (7) of such section 3306(v). 
The Secretary shall, within 30 days after receiv-
ing a complete application, notify the State 
agency of the State of the Secretary’s findings 
with respect to the requirements of such para-
graph (7). 
(B) FINDINGS.—If the Secretary finds 
that the short-time compensation program oper-
ated by the State meets the requirements of 
such paragraph (7), the Secretary shall certify 
such State’s short-time compensation program 
thereby making such State eligible for full reim-
bursement under this subsection.
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(b) TIMING OF APPLICATION SUBMITTALS.—No ap-
plication under subsection (a)(3) may be considered if sub-
mitted before the date of enactment of this Act or after 
the latest date necessary (as specified by the Secretary) 
to ensure that all payments under this section are made 
before September 30, 2011. 
(c) TERMS OF PAYMENTS.—Payments made to a 
State under subsection (a)(1) shall be payable by way of 
reimbursement in such amounts as the Secretary esti-
mates the State will be entitled to receive under this sec-
tion for each calendar month, reduced or increased, as the 
case may be, by any amount by which the Secretary finds 
that the Secretary’s estimates for any prior calendar 
month were greater or less than the amounts which should 
have been paid to the State. Such estimates may be made 
on the basis of such statistical, sampling, or other method 
as may be agreed upon by the Secretary and the State 
agency of the State involved. 
(d) LIMITATIONS.— 
(1) GENERAL
PAYMENT
LIMITATIONS.—No 
payments shall be made to a State under this sec-
tion for benefits paid to an individual by the State 
pursuant to a short-time compensation program that 
is in excess of 26 weeks of benefits. 
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(2) EMPLOYER
LIMITATIONS.—No payments 
shall be made to a State under this section for bene-
fits paid to an individual by the State pursuant to 
a short-time compensation program if such indi-
vidual is employed by an employer— 
(A) whose workforce during the 3 months 
preceding the date of the submission of the em-
ployer’s short-time compensation plan has been 
reduced by temporary layoffs of more than 20 
percent; 
(B) on a seasonal, temporary, or intermit-
tent basis; or 
(C) engaged in a labor dispute. 
(3) PROGRAM PAYMENT LIMITATION.—In mak-
ing any payments to a State under this section pur-
suant to a short-time compensation program, the 
Secretary may limit the frequency of employer par-
ticipation in such program. 
(e) CHARGING RULE.—Under a short-time com-
pensation program reimbursed under this section, a State 
may require short-time compensation benefits paid to an 
individual to be charged to a participating employer re-
gardless of the base period charging rule. 
(f) RETENTION REQUIREMENT.— 
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(1) IN
GENERAL.—A participating employer 
under this section is required to comply with the 
terms of the written plan approved by the State 
agency and act in good faith to retain participating 
employees, and the State shall, in the event of any 
violation, require such employer to repay to the 
State a sum based on the amount expended by the 
State under the program as a result of that viola-
tion. 
(2) OVERSIGHT AND MONITORING.—The Sec-
retary shall establish an oversight and monitoring 
process by regulation by which State agencies will 
ensure that participating employers comply with the 
requirements of paragraph (1). 
(3) PENALTY REMITTANCE.—In the case of any 
State which receives reimbursement under this sec-
tion, if such State determines that a violation of 
paragraph (1) has occurred, the State shall transfer 
an appropriate amount to the United States of the 
repayment the State required of the employer pursu-
ant to such paragraph. 
(g) FUNDING.—There are appropriated, from time to 
time, out of any moneys in the Treasury not otherwise 
appropriated, to the Secretary, such sums as the Secretary 
certifies are necessary to carry out this section (including 
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to reimburse any additional administrative expenses in-
curred by the States in operating such short-time com-
pensation programs). 
(h) DEFINITION OF STATE.—In this section, the term 
‘‘State’’ includes the District of Columbia, the Common-
wealth of Puerto Rico, and the Virgin Islands. 
Æ 
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