1. Short title
This Act may be cited as the “Workforce Retention Act of 2020”.
Workforce Retention Act of 2020
A BILL
To improve State short-time compensation programs, and for other purposes.
2. Extension of temporary financing of short-time compensation programs
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”.
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”.
3. Improvements to short-time compensation programs
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.”
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—
in subsection (b)—
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.”
by striking paragraph (3); and
in subsection (c)(1)(A), by striking “one-half” and inserting “100 percent”.
4. Enactment of permanent short-time compensation programs
Requirement—
In general— Section 3304(a) of the Internal Revenue Code of 1986 (relating to approval of State unemployment compensation laws) is amended—
in paragraph (4)(E), by inserting “, as required under paragraph (19)” after “3306(v))”;
in paragraph (18), by striking “and” at the end;
by redesignating paragraph (19) as paragraph (20); and
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”
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)”.
Effective date— The amendments made by subsection (a) shall apply to weeks of unemployment beginning on or after the earlier of—
the date the State changes its statutes, regulations, or policies in order to comply with such amendments; or
January 1, 2023.
5. Requirements for short-time compensation programs
Requirement—
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—
in subsection (a)—
in paragraph (19)—
by inserting “subject to paragraph (20),” before “payment of short-time compensation”; and
by striking “and” at the end;
by redesignating paragraph (20) as paragraph (21); and
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”
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.”
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”.
Effective date— The amendments made by subsection (a) shall apply to weeks of unemployment beginning on or after the earlier of—
the date the State changes its statutes, regulations, or policies in order to comply with such amendments; or
January 1, 2023.
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:
“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).”
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).
7. Improved administration
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.”
Effective date— The amendments made by subsection (a) shall apply to weeks of unemployment beginning on or after the earlier of—
the date the State changes its statutes, regulations, or policies in order to comply with such amendments; or
January 1, 2023.
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:
“(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.”
9. Department of Labor study and report on short-time compensation programs
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—
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));
the extent to which such short-time compensation programs averted layoffs; and
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.
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.
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.
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”.
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.”