The $2.2 trillion CARES Act, which Congress passed in March to provide aid and loans to a wide swathe of American businesses and workers, promised to temporarily reimburse 100% of short-time compensation paid by states with programs. The act also provided funding for states without programs to set them up.

Three Democratic senators have proposed a further expansion, offering participating businesses access to grants covering as much as 50% of fixed costs beyond payroll and increasing the maximum by which employers can reduce worker hours to 80% from 60%, among other changes.

One strong incentive for businesses to use short-time compensation programs now: In addition to the pro-rated unemployment benefits, workers also receive $600 a week of Federal Pandemic Unemployment Compensation. (This is set to expire at the end of July; the Democratic proposal would extend it through the end of the year.) The extra weekly payment means that for some people, a reduction in hours effectively can mean a raise.

“Both from an employer and an employee standpoint, I really like the program,” said Denise Brown, Molly Moon’s director of finance and human resources. With shared work, “we can do part-time hours and not have a negative financial impact on the employees.”

As unemployment agencies struggle to keep up with the unprecedented rise in filings, shared-work programs in some states offer another positive for employers and employees: an easier route to benefit money. Their labor departments have dedicated teams to parse through the applications, bypassing the backlogged main portals; they even allow companies to submit claims on behalf of workers.

“I think that’s the biggest thing: Employees don’t have to go file themselves; it’s all part of one package,” said Garrett Sheehan, president and CEO of the greater New Haven chamber.

For Molly Moon Neitzel, founder and CEO of her namesake Seattle-area ice cream shops, the program offers a way to retain employees she has spent time training and who have in turn become part of the company culture. The former political activist opened her first shop 12 years ago, aiming to create a business that took care of workers with living wages, health insurance and a retirement plan.

“One of the things that makes me work so hard right now is that I just want to be a company that never raced to the bottom, even in an international crisis, but that comes out of this crisis with all of those values intact and those jobs still here for our workers and maybe more,” Neitzel said.

This article was provided by Bloomberg News.

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