The CARES Act & Short-Term Compensation Programs

By May 13, 2020CARES Act, COVID-19

The Department of Labor (DOL) provided guidance on the CARES Act and Short-Term Compensation (STC) programs. The DOL issued this guidance in the Unemployment Insurance Program Letter 20-21 and included the following:

  1. An STC program is a layoff aversion program, also known as a shared work program. With this program, employers can reduce their associates’ work hours and preserve their associates’ jobs during a workforce interruption like COVID-19. Associates can, in turn, receive reduced unemployment benefits.
  2. According to the DOL, an STC program can “serve as a means of bringing most, or all, of a temporarily laid off workforce ac to the job, even if social distancing measures, a decline in business, or other factors prevent operating at full staffing levels.”
  3. CARES Act allows relief for the below:
    1. Temporary, one hundred percent federal financing of STC payments in a state with an STC program, whether that program is new or pre-existing
    2. $100 million in grants to support states that implement and administer STC programs
    3. DOL will allot technical assistance and guidance to states that implement STC programs


Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at too.

Please reach out to your representative with any questions.

Mike Parker

Author Mike Parker

Mike has 30 years of experience in unemployment cost control management, and has been with Thomas & Company for 25 years. He is the primary contact with state agencies building strong relationships, lobbying for opportunities that increase quality of service and efficiencies, and insuring compliance with state specific requirements. He works with the client service team, answering technical questions related to the unemployment insurance programs administered by the individual states and oversees the processes associated with wage audits and fraudulent claim inquiries. Mike is a member of the SIDES Operations Committee and currently sits on four Operations Committee subcommittees.

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