Short-time compensation (STC) arrangements

26 states, including Washington State, have Short-time Compensation Arrangements (STC). STC allows employers to reduce hours of work for employees rather than laying-off some employees while others continue to work full time.

Under the CARES Act, the federal government will temporarily provide full funding for states with existing Short‐Time Compensation programs. Employees are permitted to collect a percentage of their unemployment compensation (UC) benefits to replace a portion of their lost wages. Employers must still pay a portion of the employee’s wages to the employee and the state will pay reduced unemployment benefits. The federal government will provide funding to the states for the other half.

This program will only make sense if your business is required to cut-back hours of your employees. The STC can be used in conjunction with the Payroll Protection Program.