Title: Workforce Retention Act of 2020
Policy area: Labor and Employment

Summary:
Workforce Retention Act of 2020  This bill extends temporary funding for short-time compensation (STC) programs through December 22, 2022, and establishes state requirements for permanent, federally-financed STC programs. (STC, also known as work sharing, is a program within the federal-state unemployment system that provides pro-rated unemployment compensation to workers whose hours have been reduced in lieu of a layoff.)

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4303 Introduced in Senate (IS)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workforce Retention Act of 2020''.

SEC. 2. EXTENSION OF TEMPORARY FINANCING OF SHORT-TIME COMPENSATION 
              PROGRAMS.

    (a) States With Programs in Law.--Section 2108(b)(2) of the Relief 
for Workers Affected by Coronavirus Act (contained in subtitle A of 
title II of division A of the CARES Act (Public Law 116-136)) is 
amended by striking ``December 31, 2020'' and inserting ``December 31, 
2022''.
    (b) States With Short-Time Compensation Agreements.--Section 
2109(d)(2) of the Relief for Workers Affected by Coronavirus Act 
(contained in subtitle A of title II of division A of the CARES Act 
(Public Law 116-136)) is amended by striking ``December 31, 2020'' and 
inserting ``December 31, 2022''.

SEC. 3. IMPROVEMENTS TO SHORT-TIME COMPENSATION PROGRAMS.

    (a) States With Programs in Law.--Section 2108(a) of the Relief for 
Workers Affected by Coronavirus Act (contained in subtitle A of title 
II of division A of the CARES Act (Public Law 116-136)) is amended by 
striking paragraph (3) and inserting the following:
            ``(3) Limitations on payments.--No payments shall be made 
        to a State under this section for short-time compensation paid 
        to an individual by the State during a benefit year in excess 
        of 26 times the amount of regular compensation (including 
        dependents' allowances) under the State law payable to such 
        individual for a week of total unemployment.''.
    (b) States With Short-Time Compensation Agreements.--Section 2109 
of the Relief for Workers Affected by Coronavirus Act (contained in 
subtitle A of title II of division A of the CARES Act (Public Law 116-
136)) is amended--
            (1) in subsection (b)--
                    (A) by striking paragraph (2) and inserting the 
                following:
            ``(2) Limitations on plans.--A short-time compensation plan 
        approved by a State shall not permit the payment of short-time 
        compensation to an individual by the State during a benefit 
        year in excess of 26 times the amount of regular compensation 
        (including dependents' allowances) under the State law payable 
        to such individual for a week of total unemployment.''; and
                    (B) by striking paragraph (3); and
            (2) in subsection (c)(1)(A), by striking ``one-half'' and 
        inserting ``100 percent''.

SEC. 4. ENACTMENT OF PERMANENT SHORT-TIME COMPENSATION PROGRAMS.

    (a) Requirement.--
            (1) In general.--Section 3304(a) of the Internal Revenue 
        Code of 1986 (relating to approval of State unemployment 
        compensation laws) is amended--
                    (A) in paragraph (4)(E), by inserting ``, as 
                required under paragraph (19)'' after ``3306(v))'';
                    (B) in paragraph (18), by striking ``and'' at the 
                end;
                    (C) by redesignating paragraph (19) as paragraph 
                (20); and
                    (D) by inserting after paragraph (18) the following 
                new paragraph:
            ``(19) payment of short-time compensation is made under a 
        short-time compensation program (as defined in section 3306(v)) 
        under the State law; and''.
            (2) Conforming amendment.--Section 303(a)(5) of the Social 
        Security Act (42 U.S.C. 503(a)(5)), is amended, in the fifth 
        proviso, by inserting ``, as required under section 3304(a)(19) 
        of such Code'' after ``1986)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to weeks of unemployment beginning on or after the earlier of--
            (1) the date the State changes its statutes, regulations, 
        or policies in order to comply with such amendments; or
            (2) January 1, 2023.

SEC. 5. REQUIREMENTS FOR SHORT-TIME COMPENSATION PROGRAMS.

    (a) Requirement.--
            (1) In general.--Section 3304 of the Internal Revenue Code 
        of 1986 (relating to approval of State unemployment 
        compensation laws), as amended by section 3, is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (19)--
                                    (I) by inserting ``subject to 
                                paragraph (20),'' before ``payment of 
                                short-time compensation''; and
                                    (II) by striking ``and'' at the 
                                end;
                            (ii) by redesignating paragraph (20) as 
                        paragraph (21); and
                            (iii) by inserting after paragraph (19) the 
                        following new paragraph:
            ``(20) subject to subsection (g), with respect to the 
        short-time compensation program requirement under paragraph 
        (19), the State law--
                    ``(A) does not prohibit any employer, other than an 
                employer that is delinquent in the payment of 
                unemployment insurance taxes, from participating in 
                such program solely based on the employer's experience 
                rating;
                    ``(B) allows any employer with four or more 
                employees to participate in such program;
                    ``(C) in the case where the State has continued 
                weakness in economic demand affecting an employer, 
                provides for approval of such employer's short-time 
                compensation for up to 52 weeks;
                    ``(D) prohibits a State from relying solely on an 
                employer's history of recent layoffs as the basis for 
                any disapproval of such employer's short-time 
                compensation plan;
                    ``(E) does not prohibit submission or consideration 
                of an employer's short-time compensation plan or any 
                requested extension of such plan less frequently than 
                once in a 2-year period;
                    ``(F) requires an employer with an approved short-
                time compensation plan to certify on a weekly basis the 
                hour reduction for any employees covered under such 
                plan without regard for earnings from an employer other 
                than the employer covered under such plan, eliminating 
                any requirement that such employees individually 
                certify any hour reduction each week; and
                    ``(G) requires a State to increase the maximum 
                percentage of workweek reduction to qualify for a 
                short-time compensation program from 60 percent to 80 
                percent; and''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(g) Authority To Sunset.--Any State that enacts a State law 
providing for the payment of short-time compensation under a short-time 
compensation program under paragraph (19) of subsection (a) may include 
a provision in such law that permits the requirements under paragraph 
(20) of such subsection (a) to expire after December 31, 2027.''.
            (2) Conforming amendment.--Section 3306(v)(3) of the 
        Internal Revenue Code of 1986 is amended by striking ``the 
        percentage, if any, that is determined by the State to be 
        appropriate (but in no case more than 60 percent),'' and 
        inserting ``80 percent''.
            (3) Effective date.--The amendments made by subsection (a) 
        shall apply to weeks of unemployment beginning on or after the 
        earlier of--
                    (A) the date the State changes its statutes, 
                regulations, or policies in order to comply with such 
                amendments; or
                    (B) January 1, 2023.
    (b) Permanent Financing for Short-Time Compensation Programs.--
Title IX of the Social Security Act (42 U.S.C. 1101 et seq.) is amended 
by adding at the end the following:

``SEC. 912. PERMANENT FINANCING FOR SHORT-TIME COMPENSATION PROGRAMS.

    ``Beginning on January 1, 2023, there shall be paid to each State 
with a State law providing for the payment of short-time compensation 
under a permanent short-time compensation program that meets the 
requirements for such a program under section 3306(v) and paragraph 
(20) of section 3304(a) of the Internal Revenue Code of 1986, an amount 
equal to--
            ``(1) 100 percent of the amount of short-time compensation 
        paid to individuals by the State pursuant to such program; and
            ``(2) any additional administrative expenses incurred by 
        the State by reason of such program (as determined by the 
        Secretary).''.

SEC. 6. STANDARD FOR TIMELINESS.

    Not later than 90 days after the date of enactment of this Act, the 
Secretary of Labor shall establish a standard for timeliness for State 
determinations of approval of short-time compensation plans under a 
short-time compensation program (as defined in section 3306(v) of the 
Internal Revenue Code of 1986).

SEC. 7. IMPROVED ADMINISTRATION.

    (a) Administrative Improvements.--Section 303 of the Social 
Security Act (42 U.S.C. 503) is amended by adding at the end the 
following:
    ``(n) Annual Reports on Short-Time Compensation Programs.--
            ``(1) In general.--The State agency charged with the 
        administration of the State law shall--
                    ``(A) provide an annual report to the Secretary of 
                Labor on short-time compensation program activity 
                within their State, including information regarding--
                            ``(i) the number of approved employer 
                        short-time compensation plans;
                            ``(ii) the size and industry of any covered 
                        employer;
                            ``(iii) the number of employees covered by 
                        any such approved plan;
                            ``(iv) the number of layoffs averted as a 
                        result of short-time compensation program 
                        utilization; and
                            ``(v) the gender, race, ethnicity, and age 
                        of any employee covered by any such approved 
                        plan; and
                    ``(B) review economic data, layoff histories, and 
                industry trends to identify any employer who is at risk 
                for future layoffs and conduct targeted outreach and 
                education on any short-time compensation program 
                offered by the State.
            ``(2) Enforcement.--Whenever the Secretary of Labor, after 
        reasonable notice and opportunity for hearing to the State 
        agency charged with the administration of the State law, finds 
        that there is a failure to comply substantially with the 
        requirements of paragraph (1), the Secretary of Labor shall 
        notify such State agency that further payments will not be made 
        to the State until the Secretary of Labor is satisfied that 
        there is no longer any such failure. Until the Secretary of 
        Labor is so satisfied, such Secretary shall make no further 
        certification to the Secretary of the Treasury with respect to 
        such State.
            ``(3) Funding.--There are appropriated, out of moneys in 
        the Treasury not otherwise appropriated, to the Secretary of 
        Labor, $20,000,000 to carry out this subsection. Amounts 
        appropriated under the preceding sentence shall remain 
        available until expended.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to weeks of unemployment beginning on or after the earlier of--
            (1) the date the State changes its statutes, regulations, 
        or policies in order to comply with such amendments; or
            (2) January 1, 2023.

SEC. 8. GRACE PERIOD FOR FULL FINANCING OF SHORT-TIME COMPENSATION 
              PROGRAMS.

    Section 2108(c) of the Relief for Workers Affected by Coronavirus 
Act (contained in subtitle A of title II of division A of the CARES Act 
(Public Law 116-136)) is amended by striking ``shall be eligible'' and 
all that follows through the end and inserting the following:
    ``shall be eligible--
            ``(1) for payments under subsection (a) for weeks of 
        unemployment beginning after the effective date of such 
        enactment; and
            ``(2) for an additional payment equal to the total amount 
        of payments for which the State is eligible pursuant to an 
        agreement under section 2109 for weeks of unemployment before 
        such effective date.''.

SEC. 9. DEPARTMENT OF LABOR STUDY AND REPORT ON SHORT-TIME COMPENSATION 
              PROGRAMS.

    (a) Study.--The Secretary of Labor (in this section referred to as 
the ``Secretary'') shall conduct a study on State short-time 
compensation programs (as defined in section 3306(v) of the Internal 
Revenue Code of 1986). Such study shall include an analysis of--
            (1) the operation and results of the short-time 
        compensation programs contained in the Relief for Workers 
        Affected by Coronavirus Act (contained in subtitle A of title 
        II of division A of the CARES Act (Public Law 116-136));
            (2) the extent to which such short-time compensation 
        programs averted layoffs; and
            (3) any short-time compensation program, or the equivalent, 
        used in Organisation for Economic Co-operation and Development 
        member countries during the COVID-19 pandemic, with the aim of 
        identifying improvements to the short-time compensation 
        programs used in the United States.
    (b) Report.--Not later than January 1, 2025, the Secretary shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a), together with recommendations for any 
such legislation or administrative action as the Secretary determines 
appropriate.
    (c) Funding.--There are appropriated, out of moneys in the Treasury 
not otherwise appropriated, to the Secretary of Labor, $750,000 to 
carry out this section. Amounts appropriated under the preceding 
sentence shall remain available until expended.

SEC. 10. INCREASED FUNDING FOR GRANTS FOR SHORT-TIME COMPENSATION 
              PROGRAMS.

    Section 2110(g) of the Relief for Workers Affected by Coronavirus 
Act (contained in subtitle A of title II of division A of the CARES Act 
(Public Law 116-136)) is amended by striking ``100,000,000'' and 
inserting ``250,000,000''.

SEC. 11. SHORT-TIME COMPENSATION ENROLLMENT INCENTIVE PAYMENTS.

    Section 903 of the Social Security Act (42 U.S.C. 1103) is amended 
by adding at the end the following:
    ``(j) Short-Time Compensation Enrollment Payments.--
            ``(1) In general.--For each of the fiscal years 2021 and 
        2022, the Secretary of Labor shall provide for the making of 
        short-time compensation enrollment incentive payments (in this 
        subsection referred to as `incentive payments') to the accounts 
        of the States in the Unemployment Trust Fund (as established by 
        section 904(a)), by transfer from amounts in the Federal 
        unemployment account (as established by section 905(g)), in 
        accordance with succeeding provisions of this subsection.
            ``(2) Certification.--
                    ``(A) Initial benchmark.--The Secretary of Labor 
                shall certify an incentive payment to any State that 
                increases the number of short-time compensation claims 
                as a percentage of all unemployment insurance weekly 
                claims of such State to an average of not less than 5 
                percent for a 3-month period.
                    ``(B) Additional benchmarks.--The Secretary may 
                create additional benchmarks, upon which to certify an 
                incentive payment, for any State that increases the 
                number of short-time compensation claims as a 
                percentage of all unemployment insurance weekly claims 
                of such State for a 3-month period.
            ``(3) Funding.--There are appropriated, out of moneys in 
        the Treasury not otherwise appropriated, to the Federal 
        unemployment account, $100,000,000 to carry out this 
        subsection. Amounts appropriated under the preceding sentence 
        shall remain available through fiscal year 2022.''.
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