Wage insurance and short-time compensation grants

(a) Grants authorized Subject to the availability of funds for this purpose from the AI Horizon Fund established in section 101(b), the Secretary of Labor may award grants to States on a competitive basis to— (1) establish or operate pilot programs to provide wage insurance to eligible individuals; or (2) establish, expand, or enhance a short-time compensation program. (b) Wage insurance A State seeking a grant for a wage insurance pilot program under subsection (a)(1) may submit an application to the Secretary at such time, in such a manner, and containing such information as the Secretary may require, including a description of— (1) individuals eligible for wage insurance payments under such a program, consideration of which may be based on individual earnings loss in occupations, industries, regions, or employer groups determined to be impacted by artificial intelligence or related technological change; (2) the program’s design, including the duration of wage insurance payments (which shall not be longer than 2 years), amount of wage insurance payments, employer reporting requirements, how the State will partner with private employers, and other design features as the Secretary may require; and (3) how a State will evaluate such program, including its impact on— (A) reemployment and duration of reemployment; (B) wages upon reemployment, including cumulative earnings over time; and (C) unemployment and duration of unemployment. (c) Short-Time compensation program (1) Application and use of funds A State seeking a grant for a short-time compensation program under subsection (a)(2) may submit an application to the Secretary at such time, in such a manner, and containing such information as the Secretary may require, including a description of— (A) how funds will be used, which may include— (i) implementing or improving the administration of a short-time compensation program; (ii) increasing participation, including through promotion to, and enrollment of, employers and workers and the creation or support of rapid response teams to advise employers about alternatives to layoffs; (iii) providing technical assistance to employers seeking to participate in a short-time compensation program, including assessing feasibility of participating in such a program; (iv) the development or enhancement of systems to automate— (I) the submission and approval of plans and the filing and approval of new claims; and (II) ongoing short-time compensation claims; and (v) coordination of benefits with an existing unemployment compensation program; and (B) how the program will be evaluated for effectiveness in preventing layoffs. (2) Testing A State seeking a grant for a short-time compensation program under subsection (a)(2) may test approaches to increasing the use and effectiveness of short-time compensation, including approaches designed to prevent layoffs resulting from artificial intelligence or technological change. (d) Evaluation and report (1) Ongoing evaluation The Secretary shall conduct an ongoing evaluation of the grants made under this section. (2) Report Not more than 5 years after the date on which the Secretary begins to make grants under this section, and annually thereafter, the Secretary shall submit to the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report on the evaluation conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Secretary determines appropriate. (e) Recoupment The Secretary shall establish a process under which the Secretary shall recoup the amount of any grant awarded to a State under the authorization in subsection (a) if the Secretary determines that, during the 2-year period beginning on the first date that any such grant is awarded to the State, the State— (1) in the case of— (A) a grant under subsection (a)(1), terminated the State’s wage insurance program; or (B) a grant under subsection (a)(2), terminated the State’s short-time compensation program; or (2) failed to meet appropriate requirements with respect to the applicable program (as established by the Secretary). (f) Administration The Secretary is authorized to use 0.25 percent of the funds available under this section to provide for outreach and to share best practices with respect to this section. (g) Definitions In this section: (1) Secretary The term Secretary means the Secretary of Labor. (2) Short-time compensation program The term short-time compensation program has the meaning given such term in section 3306(v) of the Internal Revenue Code of 1986. (3) State The term State means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and the United States Virgin Islands. (4) Wage insurance The term wage insurance means payments to an eligible individual who obtains reemployment at wages lower than the wages received by the individual at the time of separation from prior employment, in an amount equal to a specified percentage of the difference between— (A) the wages received by the individual at the time of separation; and (B) the wages received by the individual from reemployment.