Effect of Employer Outreach on Short-Time Compensation Participation in California

Short‑Time Compensation (STC) is a layoff‑aversion program in thirty US states that allows employers to reduce hours instead of laying off workers. STC is a promising tool for managing potential AI‑driven job disruption by helping firms retain valuable workers while incorporating AI tools, and allowing workers time to reskill or transition to new jobs. By staggering layoffs, STC can help prevent market crowding in case of widespread AI-driven layoffs. Despite its scalability and existing infrastructure, STC accounts for less than two percent of Unemployment Insurance (UI) claims nationally, partly due to low employer awareness. This large-scale study uses an encouragement design to evaluate whether employer outreach increases program take‑up, especially among industries exposed to AI-related disruptions. We will randomly assign half of approximately 500,000 STC-eligible California firms to receive STC outreach through direct mail, email, and digital channels over a 12‑month period. Primary outcomes include STC take‑up and employer awareness; secondary outcomes include worker‑level employment, earnings and layoff, and firm survival and stability. The findings will help states expand adoption, encourage additional states to establish STC programs, and inform whether STC should play a larger role in the US workforce policy toolkit to address AI-related job losses.