The U.S. Department of Labor (DOL) announced Ohio will receive a $3.7 million grant to implement and promote the state’s short-time compensation (STC) program, which will help the state economy by keeping people employed.

STC programs are a form of layoff prevention, also known as “work sharing," according to DOL materials. These programs allow employers to reduce the work hours for groups of employees as an alternative to laying them off during economic downturns.

The programs work like this: employees who have their hours reduced are supplemented by a percentage of the weekly unemployment compensation they would have received had they been laid off. Employees can keep their jobs (and benefits) while an employer can maintain his or her workforce – increasing hours again when business picks back up, according to federal STC program materials.

“Short-time compensation is an innovative solution to a foreseeable problem that helps businesses and employees maintain a level of economic security during difficult economic periods,” U.S. Secretay of Labor Thomas Perez said in a statement. “I commend Ohio for taking advantage of these federal incentives, and I encourage all states to evaluate whether they can benefit from the available federal funds.”

Of the funds awarded, Ohio will allocate $1,238,303 to implement a new STC program, while the remaining $2,476,605 will go toward a public information campaign to educate workers and employers about the advantages of STC programs, local paper The Norwalk Reflector reports.

Funding for STC programs was made available by the Middle Class Tax Relief and Job Creation Act of 2012, which gave the Secretary of Labor the authority to award grants to implement or improve STC programs nationally, as well as promote programs to enroll employers.

According to DOL materials, many states have been operating STC programs for years, including Rhode Island, Washington, Missouri and others.

For more information on STC programs, visit the website, or watch a video of Secretary Perez explaining the benefits of short time compensation programs below.

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