Workforce Retention Act of 2020

II 116TH CONGRESS 2D SESSION S. 4303 To improve State short-time compensation programs, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 23, 2020 Mr. REED introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To improve State short-time compensation programs, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Workforce Retention 4 Act of 2020’’. 5 SEC. 2. EXTENSION OF TEMPORARY FINANCING OF SHORT- 6 TIME COMPENSATION PROGRAMS. 7 (a) STATES WITH PROGRAMS IN LAW.—Section 8 2108(b)(2) of the Relief for Workers Affected by 9 Coronavirus Act (contained in subtitle A of title II of divi- 10 sion A of the CARES Act (Public Law 116–136)) is 11 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 2 •S 4303 IS amended by striking ‘‘December 31, 2020’’ and inserting 1 ‘‘December 31, 2022’’. 2 (b) STATES WITH SHORT-TIME COMPENSATION 3 AGREEMENTS.—Section 2109(d)(2) of the Relief for 4 Workers Affected by Coronavirus Act (contained in sub- 5 title A of title II of division A of the CARES Act (Public 6 Law 116–136)) is amended by striking ‘‘December 31, 7 2020’’ and inserting ‘‘December 31, 2022’’. 8 SEC. 3. IMPROVEMENTS TO SHORT-TIME COMPENSATION 9 PROGRAMS. 10 (a) STATES WITH PROGRAMS IN LAW.—Section 11 2108(a) of the Relief for Workers Affected by Coronavirus 12 Act (contained in subtitle A of title II of division A of 13 the CARES Act (Public Law 116–136)) is amended by 14 striking paragraph (3) and inserting the following: 15 ‘‘(3) LIMITATIONS ON PAYMENTS.—No pay- 16 ments shall be made to a State under this section 17 for short-time compensation paid to an individual by 18 the State during a benefit year in excess of 26 times 19 the amount of regular compensation (including de- 20 pendents’ allowances) under the State law payable to 21 such individual for a week of total unemployment.’’. 22 (b) STATES WITH SHORT-TIME COMPENSATION 23 AGREEMENTS.—Section 2109 of the Relief for Workers 24 Affected by Coronavirus Act (contained in subtitle A of 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 3 •S 4303 IS title II of division A of the CARES Act (Public Law 116– 1 136)) is amended— 2 (1) in subsection (b)— 3 (A) by striking paragraph (2) and insert- 4 ing the following: 5 ‘‘(2) LIMITATIONS ON PLANS.—A short-time 6 compensation plan approved by a State shall not 7 permit the payment of short-time compensation to 8 an individual by the State during a benefit year in 9 excess of 26 times the amount of regular compensa- 10 tion (including dependents’ allowances) under the 11 State law payable to such individual for a week of 12 total unemployment.’’; and 13 (B) by striking paragraph (3); and 14 (2) in subsection (c)(1)(A), by striking ‘‘one- 15 half’’ and inserting ‘‘100 percent’’. 16 SEC. 4. ENACTMENT OF PERMANENT SHORT-TIME COM- 17 PENSATION PROGRAMS. 18 (a) REQUIREMENT.— 19 (1) IN GENERAL.—Section 3304(a) of the In- 20 ternal Revenue Code of 1986 (relating to approval 21 of State unemployment compensation laws) is 22 amended— 23 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 4 •S 4303 IS (A) in paragraph (4)(E), by inserting ‘‘, as 1 required under paragraph (19)’’ after 2 ‘‘3306(v))’’; 3 (B) in paragraph (18), by striking ‘‘and’’ 4 at the end; 5 (C) by redesignating paragraph (19) as 6 paragraph (20); and 7 (D) by inserting after paragraph (18) the 8 following new paragraph: 9 ‘‘(19) payment of short-time compensation is 10 made under a short-time compensation program (as 11 defined in section 3306(v)) under the State law; 12 and’’. 13 (2) CONFORMING AMENDMENT.—Section 14 303(a)(5) of the Social Security Act (42 U.S.C. 15 503(a)(5)), is amended, in the fifth proviso, by in- 16 serting ‘‘, as required under section 3304(a)(19) of 17 such Code’’ after ‘‘1986)’’. 18 (b) EFFECTIVE DATE.—The amendments made by 19 subsection (a) shall apply to weeks of unemployment be- 20 ginning on or after the earlier of— 21 (1) the date the State changes its statutes, reg- 22 ulations, or policies in order to comply with such 23 amendments; or 24 (2) January 1, 2023. 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 5 •S 4303 IS SEC. 5. REQUIREMENTS FOR SHORT-TIME COMPENSATION 1 PROGRAMS. 2 (a) REQUIREMENT.— 3 (1) IN GENERAL.—Section 3304 of the Internal 4 Revenue Code of 1986 (relating to approval of State 5 unemployment compensation laws), as amended by 6 section 3, is amended— 7 (A) in subsection (a)— 8 (i) in paragraph (19)— 9 (I) by inserting ‘‘subject to para- 10 graph (20),’’ before ‘‘payment of 11 short-time compensation’’; and 12 (II) by striking ‘‘and’’ at the end; 13 (ii) by redesignating paragraph (20) 14 as paragraph (21); and 15 (iii) by inserting after paragraph (19) 16 the following new paragraph: 17 ‘‘(20) subject to subsection (g), with respect to 18 the short-time compensation program requirement 19 under paragraph (19), the State law— 20 ‘‘(A) does not prohibit any employer, other 21 than an employer that is delinquent in the pay- 22 ment of unemployment insurance taxes, from 23 participating in such program solely based on 24 the employer’s experience rating; 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 6 •S 4303 IS ‘‘(B) allows any employer with four or 1 more employees to participate in such program; 2 ‘‘(C) in the case where the State has con- 3 tinued weakness in economic demand affecting 4 an employer, provides for approval of such em- 5 ployer’s short-time compensation for up to 52 6 weeks; 7 ‘‘(D) prohibits a State from relying solely 8 on an employer’s history of recent layoffs as the 9 basis for any disapproval of such employer’s 10 short-time compensation plan; 11 ‘‘(E) does not prohibit submission or con- 12 sideration of an employer’s short-time com- 13 pensation plan or any requested extension of 14 such plan less frequently than once in a 2-year 15 period; 16 ‘‘(F) requires an employer with an ap- 17 proved short-time compensation plan to certify 18 on a weekly basis the hour reduction for any 19 employees covered under such plan without re- 20 gard for earnings from an employer other than 21 the employer covered under such plan, elimi- 22 nating any requirement that such employees in- 23 dividually certify any hour reduction each week; 24 and 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 7 •S 4303 IS ‘‘(G) requires a State to increase the max- 1 imum percentage of workweek reduction to 2 qualify for a short-time compensation program 3 from 60 percent to 80 percent; and’’; and 4 (B) by adding at the end the following new 5 subsection: 6 ‘‘(g) AUTHORITY TO SUNSET.—Any State that en- 7 acts a State law providing for the payment of short-time 8 compensation under a short-time compensation program 9 under paragraph (19) of subsection (a) may include a pro- 10 vision in such law that permits the requirements under 11 paragraph (20) of such subsection (a) to expire after De- 12 cember 31, 2027.’’. 13 (2) CONFORMING AMENDMENT.—Section 14 3306(v)(3) of the Internal Revenue Code of 1986 is 15 amended by striking ‘‘the percentage, if any, that is 16 determined by the State to be appropriate (but in no 17 case more than 60 percent),’’ and inserting ‘‘80 per- 18 cent’’. 19 (3) EFFECTIVE DATE.—The amendments made 20 by subsection (a) shall apply to weeks of unemploy- 21 ment beginning on or after the earlier of— 22 (A) the date the State changes its statutes, 23 regulations, or policies in order to comply with 24 such amendments; or 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 8 •S 4303 IS (B) January 1, 2023. 1 (b) PERMANENT FINANCING FOR SHORT-TIME COM- 2 PENSATION PROGRAMS.—Title IX of the Social Security 3 Act (42 U.S.C. 1101 et seq.) is amended by adding at 4 the end the following: 5 ‘‘SEC. 912. PERMANENT FINANCING FOR SHORT-TIME COM- 6 PENSATION PROGRAMS. 7 ‘‘Beginning on January 1, 2023, there shall be paid 8 to each State with a State law providing for the payment 9 of short-time compensation under a permanent short-time 10 compensation program that meets the requirements for 11 such a program under section 3306(v) and paragraph (20) 12 of section 3304(a) of the Internal Revenue Code of 1986, 13 an amount equal to— 14 ‘‘(1) 100 percent of the amount of short-time 15 compensation paid to individuals by the State pursu- 16 ant to such program; and 17 ‘‘(2) any additional administrative expenses in- 18 curred by the State by reason of such program (as 19 determined by the Secretary).’’. 20 SEC. 6. STANDARD FOR TIMELINESS. 21 Not later than 90 days after the date of enactment 22 of this Act, the Secretary of Labor shall establish a stand- 23 ard for timeliness for State determinations of approval of 24 short-time compensation plans under a short-time com- 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 9 •S 4303 IS pensation program (as defined in section 3306(v) of the 1 Internal Revenue Code of 1986). 2 SEC. 7. IMPROVED ADMINISTRATION. 3 (a) ADMINISTRATIVE IMPROVEMENTS.—Section 303 4 of the Social Security Act (42 U.S.C. 503) is amended 5 by adding at the end the following: 6 ‘‘(n) ANNUAL REPORTS ON SHORT-TIME COMPENSA- 7 TION PROGRAMS.— 8 ‘‘(1) IN GENERAL.—The State agency charged 9 with the administration of the State law shall— 10 ‘‘(A) provide an annual report to the Sec- 11 retary of Labor on short-time compensation 12 program activity within their State, including 13 information regarding— 14 ‘‘(i) the number of approved employer 15 short-time compensation plans; 16 ‘‘(ii) the size and industry of any cov- 17 ered employer; 18 ‘‘(iii) the number of employees covered 19 by any such approved plan; 20 ‘‘(iv) the number of layoffs averted as 21 a result of short-time compensation pro- 22 gram utilization; and 23 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 10 •S 4303 IS ‘‘(v) the gender, race, ethnicity, and 1 age of any employee covered by any such 2 approved plan; and 3 ‘‘(B) review economic data, layoff histories, 4 and industry trends to identify any employer 5 who is at risk for future layoffs and conduct 6 targeted outreach and education on any short- 7 time compensation program offered by the 8 State. 9 ‘‘(2) ENFORCEMENT.—Whenever the Secretary 10 of Labor, after reasonable notice and opportunity for 11 hearing to the State agency charged with the admin- 12 istration of the State law, finds that there is a fail- 13 ure to comply substantially with the requirements of 14 paragraph (1), the Secretary of Labor shall notify 15 such State agency that further payments will not be 16 made to the State until the Secretary of Labor is 17 satisfied that there is no longer any such failure. 18 Until the Secretary of Labor is so satisfied, such 19 Secretary shall make no further certification to the 20 Secretary of the Treasury with respect to such 21 State. 22 ‘‘(3) FUNDING.—There are appropriated, out of 23 moneys in the Treasury not otherwise appropriated, 24 to the Secretary of Labor, $20,000,000 to carry out 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 11 •S 4303 IS this subsection. Amounts appropriated under the 1 preceding sentence shall remain available until ex- 2 pended.’’. 3 (b) EFFECTIVE DATE.—The amendments made by 4 subsection (a) shall apply to weeks of unemployment be- 5 ginning on or after the earlier of— 6 (1) the date the State changes its statutes, reg- 7 ulations, or policies in order to comply with such 8 amendments; or 9 (2) January 1, 2023. 10 SEC. 8. GRACE PERIOD FOR FULL FINANCING OF SHORT- 11 TIME COMPENSATION PROGRAMS. 12 Section 2108(c) of the Relief for Workers Affected 13 by Coronavirus Act (contained in subtitle A of title II of 14 division A of the CARES Act (Public Law 116–136)) is 15 amended by striking ‘‘shall be eligible’’ and all that follows 16 through the end and inserting the following: 17 ‘‘shall be eligible— 18 ‘‘(1) for payments under subsection (a) for 19 weeks of unemployment beginning after the effective 20 date of such enactment; and 21 ‘‘(2) for an additional payment equal to the 22 total amount of payments for which the State is eli- 23 gible pursuant to an agreement under section 2109 24 VerDate Sep 11 2014 23:05 Aug 12, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on DSK79L0C42PROD with BILLS 12 •S 4303 IS for weeks of unemployment before such effective 1 date.’’. 2 SEC. 9. DEPARTMENT OF LABOR STUDY AND REPORT ON 3 SHORT-TIME COMPENSATION PROGRAMS. 4 (a) STUDY.—The Secretary of Labor (in this section 5 referred to as the ‘‘Secretary’’) shall conduct a study on 6 State short-time compensation programs (as defined in 7 section 3306(v) of the Internal Revenue Code of 1986). 8 Such study shall include an analysis of— 9 (1) the operation and results of the short-time 10 compensation programs contained in the Relief for 11 Workers Affected by Coronavirus Act (contained in 12 subtitle A of title II of division A of the CARES Act 13 (Public Law 116–136)); 14 (2) the extent to which such short-time com- 15 pensation programs averted layoffs; and 16 (3) any short-time compensation program, or 17 the equivalent, used in Organisation for Economic 18 Co-operation and Development member countries 19 during the COVID–19 pandemic, with the aim of 20 identifying improvements to the short-time com- 21 pensation programs used in the United States. 22 (b) REPORT.—Not later than January 1, 2025, the 23 Secretary shall submit to Congress a report containing the 24 results of the study conducted under subsection (a), to- 25 VerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4303.IS S4303 kjohnson on D [Text truncated for display. 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