Employers Learn of Option to Layoffs in Slow Business Cycle

Employers in some states have an alternative to layoffs during a downturn in a business cycle: short-time compensation (STC). STC allows employers to lower the average hours of employees in lieu of laying them off. So, why don’t more employers use STC where available? Turns out, it isn’t used because employers don’t know about it.

For the U.S. Department of Labor, Westat launched an information campaign to a sample of employers in Iowa and Oregon, 2 states with these programs. We found that the major barrier to use was employers simply weren’t aware of them. Once clued in, use of the Oregon program increased by 58% in Portland and 100% outside of Portland.