Short-Time Compensation Program

V.S.A. tit. 21, ch. 17, subch. 3

in effect

21 V.S.A. § 1451 Definitions

1451. Definitions As used in this subchapter: (1) “Affected unit” means a specific plan, department, shift, or other definable unit consisting of not less than five employees to which an approved short-time compensation plan applies. (2) “Defined benefit plan” means a plan described in 26 U.S.C. § 414(j). (3) “Defined contribution plan” means a plan described in 26 U.S.C. § 414(i). (4) “Short-time compensation” or “STC” means the unemployment benefits payable to employees in an affected unit under an approved short-time compensation plan as distinguished from the unemployment benefits otherwise payable under the conventional unemployment compensation provisions of this chapter. (5) “Short-time compensation plan” means a plan of an employer under which there is a reduction in the number of hours worked by employees of an affected unit rather than layoffs. The term “layoffs” for this purpose means the total separation of one or more workers in the affected unit. (6) “Short-time compensation employer” means an employer who has one or more employees covered by an approved “short-time compensation plan.” “Short-time compensation employer” means an employer with an experience rating record or an employer who makes payments in lieu of contributions to the Unemployment Compensation Trust Fund and that meets all of the following criteria: (A) Has five or more employees covered by an approved short-time compensation plan. (B) Is not delinquent in the payment of contributions or reimbursement, or in the reporting of wages. (C) Is not a negative balance employer. For the purposes of this section, a negative balance employer is an employer who has for three or more consecutive calendar years immediately prior to applying for the STC plan paid more in unemployment benefits to its employees than it has contributed to its unemployment insurance account. In the event that an employer has been a negative balance employer for three consecutive years, the employer shall be ineligible for participation unless the Commissioner grants a waiver based upon extenuating economic conditions or other good cause. (7) “Usual weekly hours of work” means the normal hours of work for full-time or part-time employees in the affected unit when that unit is operating on its regular basis not to exceed 40 hours and not including hours of overtime work. (8) “Unemployment compensation” means the unemployment benefits payable under this chapter other than short-time compensation and includes any amounts payable pursuant to an agreement under any federal law providing for compensation, assistance, or allowances with respect to unemployment. (9) “Fringe benefits” means benefits, including health insurance, retirement benefits, paid vacations and holidays, sick leave, and similar benefits that are incidents of employment. (10) “Intermittent employment” means employment that is not continuous but may consist of intervals of weekly work and intervals of no weekly work. (11) “Seasonal employment” means employment with an employer who experiences at least a 20-percent difference between its highest level of employment during a particular season and its lowest level of employment during the off-season in each of the previous three years as reported to the Department, or employment with an employer on a temporary basis during a particular season. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2011, No. 162 (Adj. Sess.), § E.401.3; 2013, No. 72, § 35a.

21 V.S.A. § 1452 Criteria for approval

1452. Criteria for approval (a) An employer wishing to participate in an STC program shall submit a Department of Labor electronic application or a signed written short-time compensation plan to the Commissioner for approval. The Commissioner may approve an STC plan only if the following criteria are met: (1) The plan identifies the specified affected units to which it applies. (2) The employees in the affected unit or units are identified by name, Social Security number, and by any other information required by the Commissioner. (3) The plan provides that if the employer provides fringe benefits, including health benefits and retirement benefits under a defined benefit plan or contributions under a defined contribution plan, to any employee whose workweek is reduced under the program, that the 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 had not been reduced. However, reductions in the benefits of short-time compensation plan participants are permitted to the extent that the reductions also apply to nonparticipant employees. (4) The usual total weekly hours of work for employees in the affected unit or units are reduced by not less than 20 percent and not more than 50 percent. (5) The plan certifies that the aggregate reduction in work hours is in lieu of layoffs of one or more workers that would have resulted in an equivalent reduction in work hours and that the Commissioner finds would have caused an equivalent dollar amount to be payable in unemployment compensation. (6) The plan certifies that the STC employer will notify the Department within 24 hours after any layoff of an employee, at which time the Commissioner shall have the right to terminate the STC plan. (7) The identified workweek reduction is applied consistently throughout the duration of the plan unless otherwise approved by the Department. (8) The plan applies to at least 10 percent of the employees in the affected unit, and when determined to be applicable by the Commissioner applies to all affected employees of the unit equally. (9) The plan shall not subsidize seasonal employers during the off- season, nor subsidize employers who have traditionally used part-time employees or intermittent employment. (10) The employer agrees to maintain records relative to the plan for a period of three years and furnish reports relating to the proper conduct of the plan and agrees to allow the Commissioner or the Commissioner’s authorized representatives access to all records necessary to verify the plan prior to approval and, after approval, to monitor and evaluate application of the plan. (11) The plan certifies that the collective bargaining agent or agents for the employees, if any, have agreed to participate in the program. If there is no bargaining unit, the employer specifies how it will notify the employees in the affected group and work with them to implement the program once the plan is approved. (12) The plan describes the manner in which the requirements of this section will be implemented and where feasible how notice will be given to an employee whose workweek is to be reduced and an estimate of the number of layoffs that would have occurred absent the ability to participate in the short-time compensation program and any other information that the U.S. Secretary of Labor determines is appropriate. (13) The employer certifies that the plan is consistent with employer obligations under applicable State and federal laws. (b) In the event of any conflict between any provision of sections 1451– 1460 of this subchapter, or the rules adopted pursuant to these sections, and applicable federal law, the federal law shall prevail and the provision shall be deemed invalid. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2007, No. 104 (Adj. Sess.), § 2; 2011, No. 162 (Adj. Sess.), § E.401.4; 2013, No. 72, § 35b, eff. June 30, 2013; 2023, No. 85 (Adj. Sess.), § 230, eff. July 1, 2024.

21 V.S.A. § 1453 Approval or rejection; resubmission

1453. Approval or rejection; resubmission The Commissioner shall approve or reject a plan in writing within 30 days after receiving it, and in the case of rejection shall state the reasons for the rejection. The reasons for rejection shall be final and nonappealable, but the employer shall be allowed to submit another plan for approval that addresses the reasons that led to the rejection of the original plan. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2011, No. 50, § 8; 2011, No. 162 (Adj. Sess.), § E.401.5; 2023, No. 85 (Adj. Sess.), § 231, eff. July 1, 2024.

21 V.S.A. § 1454 Effective date; duration

1454. Effective date; duration A plan shall be effective on the date specified in the plan or on a date mutually agreed upon by the employer and the Commissioner. It shall expire at the end of the sixth full calendar month after its effective date or on the date specified in the plan if such date is earlier; provided, that the plan is not previously revoked by the Commissioner; or on the effective date of any transfer of ownership of the legal business entity. If a plan is revoked or terminated by the Commissioner, it shall terminate on the date specified in the Commissioner’s written order of revocation. No employer shall be eligible for a short-time compensation plan that results in an employee receiving benefits in excess of 26 times the amount of regular unemployment benefits payable to such individual for a week of total unemployment. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2011, No. 162 (Adj. Sess.), § E.401.6.

21 V.S.A. § 1455 Revocation

1455. Revocation (a) The Commissioner may revoke approval of a plan for good cause. The revocation order shall be in writing and shall specify the date the revocation is effective and the reasons for revocation. (b) Good cause shall include violation of any criteria on which approval of the plan was based. (c) The action may be taken at any time by the Commissioner on the Commissioner’s own motion. The Commissioner shall review the operation of each qualified employer plan at least once during the first three months that the plan is in effect to ensure its compliance with the requirements of this subchapter. In addition, the Commissioner shall investigate any written complaint about the operation of the approved plan and determine in writing whether or not good cause exists for revocation. The determination to investigate is not appealable. (d) An employer may appeal a revocation decision by the Commissioner and the appeal shall be treated as a contested case under the Administrative Procedure Act. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2023, No. 85 (Adj. Sess.), § 232, eff. July 1, 2024.

21 V.S.A. § 1456 Modification

1456. Modification An approved STC plan may be modified by the employer with the approval of the Commissioner. If the hours of work are increased or decreased substantially beyond the level in the original plan, or any other conditions are changed substantially, the Commissioner shall approve or disapprove such modifications. The expiration of the original plan shall not change. If the substantial modifications do not meet the requirements for approval, the Commissioner shall disallow that portion of the plan in writing as specified in subsection 1455(a) of this title. Added 1985, No. 140 (Adj. Sess.), § 1.

21 V.S.A. § 1457 Eligibility

1457. Eligibility (a) An individual is eligible to receive STC benefits with respect to any week only if, in addition to eligibility for monetary entitlement, the Commissioner finds that: (1) the individual is employed during that week as a member of an affected unit under an approved short-time compensation plan that was in effect for that week; (2) the individual is able to work and is available for the normal work week with the short-time employer; (3) notwithstanding any other provisions of this chapter to the contrary, an individual is deemed unemployed in any week for which remuneration is payable to him or her as an employee in an affected unit for less than his or her normal weekly hours of work as specified under the approved short-time compensation plan in effect for the week; (4) notwithstanding any other provisions of this chapter to the contrary, an individual shall not be denied STC benefits for any week by reason of the application of provisions relating to availability for work and active search for work with an employer other than the short-time employer. (b) Eligible employees may participate, as appropriate, in training, including employer-sponsored training or worker training funded under the federal Workforce Innovation and Opportunity Act, to enhance job skills if the program has been approved by the Department. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2013, No. 72, § 35c, eff. June 30, 2013; 2019, No. 131 (Adj. Sess.), § 126.

21 V.S.A. § 1458 Short-time compensation benefits

1458. Short-time compensation benefits (a) The short-time weekly benefit amount shall be the product of the regular weekly unemployment compensation amount multiplied by the percentage of reduction in the individual’s usual weekly hours of work. (b) No individual, including a claimant for STC, is eligible in any benefit year for more than the maximum unemployment compensation entitlement payable in accordance with section 1340 of this title. (c) The STC benefits paid an individual shall be deducted from the maximum unemployment compensation entitlement amount established in accordance with section 1340 for that individual’s benefit year. (d) Claims for STC benefits shall be filed in the same manner as claims for unemployment compensation or as prescribed by the Commissioner. (e) Provisions of this subchapter and Vermont Employment Security Board rules applicable to unemployment compensation claimants shall apply to STC claimants to the extent that they are not inconsistent with this subchapter. An individual who files a new initial claim for STC benefits shall be provided, if eligible for STC benefits, a monetary determination of entitlement to STC benefits and shall serve a waiting week as required under subdivision 1343(a)(4) of this chapter. (f)(1) If an individual works in the same week for both the short-time employer and another employer and the individual’s combined hours of work for both employers are equal to or greater than 81 percent of the usual hours of work with the short-time employer, the individual shall not be entitled to benefits under these short-time provisions or the unemployment compensation provisions. (2) If an individual works in the same week for both the short-time employer and another employer and the individual’s combined hours of work for both employers are equal to or less than 80 percent of the usual hours of work for the short-time employer, the benefit amount payable for that week shall be the weekly unemployment compensation amount reduced by the same percentage that the combined hours are of the usual hours of work. A week for which benefits are paid under this provision shall count as a week of short-time compensation. (3) An individual who does not work during a week for the short-time employer, and is otherwise eligible, shall be paid the individual’s full weekly unemployment compensation benefit amount under the provisions of the regular unemployment compensation program. Such a week shall not be counted as a week for which short-time compensation benefits were received. (4) An individual who does not work the short-time employer’s identified workweek reduction hours as certified by the application due to the use of paid vacation or personal time shall be paid benefits for the week under the partial unemployment compensation provisions of the regular unemployment compensation program. (5) An individual who does not work for the short-time employer during a week but works for another employer and is otherwise eligible shall be paid benefits for that week under the partial unemployment compensation provisions of the regular UI program. Such a week shall not be counted as a week with respect to which STC benefits were received. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2007, No. 104 (Adj. Sess.), § 3; 2009, No. 124 (Adj. Sess.), § 9, eff. July 1, 2012; 2011, No. 162 (Adj. Sess.), § E401.7; 2023, No. 85 (Adj. Sess.), § 233, eff. July 1, 2024.

21 V.S.A. § 1459 Charging benefits

1459. Charging benefits STC benefits paid to an employee shall be charged to the employers in the base period. Reimbursable employers participating in the STC Program shall be assessed for the STC benefits paid their employees. Added 1985, No. 140 (Adj. Sess.), § 1; amended 2013, No. 173 (Adj. Sess.), § 6.

21 V.S.A. § 1460 Extended benefits program eligibility

1460. Extended benefits program eligibility An individual who has received all of the unemployment compensation or combined unemployment compensation and STC benefits available in a benefit year shall be considered an “exhaustee” as defined under the provisions of subdivision 1421(8) of this title. Added 1985, No. 140 (Adj. Sess.), § 1.

21 V.S.A. § 1461 Misrepresentation; penalties

1461. Misrepresentation; penalties If an approved plan or any representation for implementation of the plan is intentionally and substantially misleading or false, the employer shall be liable for any amount of benefits deemed by the Commissioner to have been improperly paid from the fund as a result thereof. Added 1985, No. 140 (Adj. Sess.), § 1.

21 V.S.A. § 1462 Period of dormancy

1462. Period of dormancy On July 1, 2020, the Short-Time Compensation Program established pursuant to sections 1451–1461 of this subchapter ceased operation. Effective upon completion of the project to implement a modernized information technology system for the unemployment insurance program in 2026, the Short-Time Compensation Program shall resume operation pursuant to the provisions of sections 1451–1461 of this subchapter. Added 2019, No. 85 (Adj. Sess.), § 20, eff. Feb. 20, 2020; amended 2025, No. 40, § 20, eff. July 1, 2025.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/21/017Fetched: 10/21/2026