Sec. 2161. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS
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## SEC. 2161 TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS ###
(a)Definition ####
(1)In general Section 3306 of the Internal Revenue Code of 1986 (26 U.S.C. 3306) is amended by adding at the end the following new subsection: > > ### “(v) Short-Time Compensation Program > > For purposes of this part, the term ‘short-time compensation program’ means a program under which— > > > #### “(1) > > the participation of an employer is voluntary; > > > #### “(2) > > an employer reduces the number of hours worked by employees in lieu of layoffs; > > > #### “(3) > > such employees whose workweeks have been reduced by at least 10 percent, and by not more than the percentage, if any, that is determined by the State to be appropriate (but in no case more than 60 percent), are not disqualified from unemployment compensation; > > > #### “(4) > > the amount of unemployment compensation payable to any such employee is a pro rata portion of the unemployment compensation which would otherwise be payable to the employee if such employee were unemployed; > > > #### “(5) > > such employees meet the availability for work and work search test requirements while collecting short-time compensation benefits, by being available for their workweek as required by the State agency; > > > #### “(6) > > eligible employees may participate, as appropriate, in training (including employer-sponsored training or worker training funded under the Workforce Investment Act of 1998) to enhance job skills if such program has been approved by the State agency; > > > #### “(7) > > the State agency shall require employers to certify that if the employer provides health benefits and retirement benefits under a defined benefit plan (as defined in section 414(j)) or contributions under a defined contribution plan (as defined in section 414(i)) to any employee whose workweek is reduced under the program that such benefits will continue to be provided to employees participating in the short-time compensation program under the same terms and conditions as though the workweek of such employee had not been reduced or to the same extent as other employees not participating in the short-time compensation program; > > > #### “(8) > > the State agency shall require an employer to submit a written plan describing the manner in which the requirements of this subsection will be implemented (including a plan for giving advance notice, where feasible, to an employee whose workweek is to be reduced) together with an estimate of the number of layoffs that would have occurred absent the ability to participate in short-time compensation and such other information as the Secretary of Labor determines is appropriate; > > > #### “(9) > > the terms of the employer’s written plan and implementation shall be consistent with employer obligations under applicable Federal and State laws; and > > > #### “(10) > > upon request by the State and approval by the Secretary of Labor, only such other provisions are included in the State law that are determined to be appropriate for purposes of a short-time compensation program.” > . ####
(2)Effective date **[**[26 U.S.C. 3306 note](/us/usc/t26/s3306)**]** Subject to paragraph (3), the amendment made by paragraph
(1)shall take effect on the date of the enactment of this Act. ####
(3)Transition period for existing programs **[**[26 U.S.C. 3306 note](/us/usc/t26/s3306)**]** In the case of a State that is administering a short-time compensation program as of the date of the enactment of this Act and the State law cannot be administered consistent with the amendment made by paragraph (1), such amendment shall take effect on the earlier of— #####
(A)the date the State changes its State law in order to be consistent with such amendment; or #####
(B)the date that is 2 years and 6 months after the date of the enactment of this Act. ###
(b)Conforming Amendments ####
(1)Internal revenue code of 1986 #####
(A)**[**[26 U.S.C. 3304](/us/usc/t26/s3304)**]** Subparagraph
(E)of section 3304(a)(4) of the Internal Revenue Code of 1986 is amended to read as follows: > > ##### “(E) > > amounts may be withdrawn for the payment of short-time compensation under a short-time compensation program (as defined under section 3306(v));” > . #####
(B)Subsection
(f)of section 3306 of the Internal Revenue Code of 1986 is amended— ######
(i)by striking paragraph
(5)(relating to short-time compensation) and inserting the following new paragraph: > > #### “(5) > > amounts may be withdrawn for the payment of short-time compensation under a short-time compensation program (as defined in subsection (v)); and” > ; and ######
(ii)by redesignating paragraph
(5)(relating to self-employment assistance program) as paragraph (6). ####
(2)Social security act **[**[42 U.S.C. 503](/us/usc/t42/s503)**]** Section 303(a)(5) of the Social Security Act is amended by striking “the payment of short-time compensation under a plan approved by the Secretary of Labor” and inserting “the payment of short-time compensation under a short-time compensation program (as defined in section 3306(v) of the Internal Revenue Code of 1986)”. ####
(3)Unemployment compensation amendments of 1992 **[**[26 U.S.C. 3304 note](/us/usc/t26/s3304)**]** Subsections
(b)through
(d)of section 401 of the Unemployment Compensation Amendments of 1992 (26 U.S.C. 3304 note) are repealed.
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