How Short-Time Compensation replaces layoffs
The United States has no single federal payment that reimburses an employer for keeping workers on the payroll during a slowdown. The closest equivalent is Short-Time Compensation (STC), also called work sharing: instead of laying people off, the employer cuts everyone's hours and the state unemployment agency pays each worker a pro-rated share of their regular weekly benefit. The money goes to the employee, not to the employer.
How the math works. The weekly STC payment is the worker's full weekly benefit amount multiplied by the percentage by which their hours were cut. Cut hours by 20 percent and the worker receives 20 percent of their normal weekly unemployment benefit on top of 80 percent of their pay. This calculator applies that formula and scales it to the number of covered employees and the length of the plan.
Legal basis. STC is defined at 26 U.S.C. ยง3306(v) and is operated by individual states under their own unemployment insurance statutes; not every state offers it. States set their own minimum and maximum hour-reduction bands, plan length caps, and employer plan-approval rules, so the band shown here is a common range rather than a national standard. Figures are current as of September 2026 and should be checked against your state agency.
This tool produces an estimate based on the standard STC formula. It does not decide eligibility: approval of the work sharing plan, the employee's benefit amount and any waiting week are determined by the state unemployment agency. This calculator is for reference only and is not legal advice. Consult a licensed attorney or your state workforce agency about your specific situation.
Frequently Asked Questions
No. The employer files and administers the work sharing plan, but the state pays the pro-rated benefit directly to each covered employee.
Short-Time Compensation is run state by state, so each state sets its own minimum and maximum reduction. Check your state's published plan rules before filing.