[Federal Register Volume 61, Number 217 (Thursday, November 7, 1996)]
[Notices]
[Pages 57714-57719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28656]
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DEPARTMENT OF LABOR
Employment and Training Administration
Federal-State Unemployment Compensation Program: Unemployment
Insurance Program Letters Interpreting Federal Unemployment Insurance
Law
The Employment and Training Administration interprets Federal law
requirements pertaining to unemployment compensation as part of its
role in the administration of the Federal-State unemployment
compensation program. These interpretations are issued in Unemployment
Insurance Program Letters (UIPLs) to the State Employment Security
Agencies (SESAs). The UIPL described below is published in the Federal
Register in order to inform the public.
UIPL 30-96
This UIPL is being issued to clarify the distinction between
``work-relief'' and ``work-training'' for purposes of coverage under
the unemployment compensation (UC) program. This UIPL broadens the
interpretation previously issued in 1986 in UIPL 15-86 and will not
require any change to State UC laws. (It should be noted that the
footnote in that UIPL incorrectly characterizes two court cases as UC
cases. A program letter correcting this will be issued at a later
date.)
UIPL 37-96
The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (PRWORA), P.L. 104-193, was enacted on August 22, 1996. This
legislation, popularly known as the welfare reform bill, made several
changes which affect the UC program. Specifically, the PRWORA:
establishes New Hire Directories at both the State and National levels;
requires that certain UC information be provided to State/National New
Hire Directories; requires that States collect quarterly wage reports
from State and local governmental entities and ``labor organizations;''
authorizes State and local child support enforcement agencies to
disclose UC data to an agent; requires State and local child support
agencies to obtain access to UC information for establishing paternity
and other purposes; affects the eligibility of aliens; and, addresses
the intercept of food stamp overissuances.
This UIPL provides information on these amendments and advises
States of those instances where amendments to State UC law are needed
to meet Federal UC law requirements. This UIPL does not, however,
address those amendments relating to the eligibility of aliens. After
completing its analysis of the amendments relating to aliens, the
Department will issue guidance to the States as appropriate.
Dated: November 4, 1996.
Timothy M. Barnicle,
Assistant Secretary of Labor.
U.S. Department of Labor
Employment and Training Administration, Washington, D.C. 20210
CLASSIFICATION: UI
CORRESPONDENCE SYMBOL:TEUL
DATE: August 8, 1996
DIRECTIVE: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 30-96
TO: ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM: MARY ANN WYRSCH, Director, Unemployment Insurance Service
SUBJECT: Work-Relief and Work-Training Exclusion
1. Purpose. To provide an interpretation of Section 3309(b)(5)
of the Federal Unemployment Tax Act (FUTA) which permits an
exception to coverage requirements of Section 3304(a)(6)(A), FUTA,
for services performed as part of an unemployment work-relief or
work-training program.
2. References. The Internal Revenue Code, including the Federal
Unemployment Tax Act (FUTA), and Unemployment Insurance Program
Letter (UIPL) 15-86, dated February 13, 1986.
3. Background. UIPL 15-86 provided the Department's
interpretation of ``work-relief'' and ``work-training'' for purposes
of assisting States in determining what services may be excluded
from coverage for unemployment compensation (UC). Since that UIPL
did not clearly distinguish between services performed in work-
relief and services performed in work-training, confusion has
resulted as to what services may actually be excluded. This UIPL
provides the Department's position on the difference between ``work-
relief'' and ``work-training.'' As this UIPL results in broadening
the interpretation taken in UIPL 15-86, it will not result in States
needing to amend their laws.
4. Federal Law Requirements. The Department has long taken the
position that, because FUTA is a remedial statute aimed at
overcoming the evils of unemployment, it is to be liberally
construed to effectuate its purposes and exemptions to its
requirements are to be narrowly construed. This interpretation
avoids ``difficulties for which the remedy was devised and adroit
schemes by some employers and employees to avoid the immediate
burdens at the expense of the benefits sought by the legislation.''
\1\
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\1\ These interpretations were stated on page 5 of Supplement
#5--Questions and Answers Supplementing Draft Language and
Commentary to Implement the Unemployment Compensation Amendments of
1976--P.L. 94-566, dated November 13, 1978. Several Federal court
decisions, including two cases involving UC, United States v. Silk,
331 U.S. 704, 712 (1947) and Farming, Inc. v. Manning, 219 F.2d 779,
782 (3d Cir., 1955), are illustrative of this position.
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Section 3304(a)(6)(A), FUTA, requires that each State pay UC
based on services performed for certain governmental entities and
nonprofit organizations. Specifically, Section 3304(a)(6)(A)
requires coverage of services to which Section 3309(a)(1) applies.
Section 3309(a)(1) applies to services excluded from the term
``employment'' solely by reason of either Section 3306(c) (7) or
(8), FUTA. Section 3306(c)(7) pertains to services performed for a
``State, or any political subdivision thereof. * * * '' Section
3306(c)(8) pertains to services performed for ``religious,
charitable, educational, or other organization described in section
501(c)(3)'' of the Internal Revenue Code. Exclusions
[[Page 57715]]
from this required coverage are found in the remaining paragraphs of
Section 3306(c) and Section 3309(b). Section 3309(b)(5) excludes
services performed--
(5) as part of an unemployment work-relief or work-training
program assisted or financed in whole or in part by any Federal
agency or an agency of a State or political subdivision thereof, by
an individual receiving such work relief or work training.
The Department's position is that while ``work-relief'' and
``work-training'' are both excluded, they are two distinct
exclusions. Work-relief projects are primarily intended to alleviate
the disadvantaged status of the individual by providing employment.
For ``work-training,'' there is no requirement that the individual
must be economically disadvantaged. Instead, work-training focuses
on improving the individual's employability. (This does not,
however, preclude the possibility that some work-training programs
be limited to the economically disadvantaged.)
As noted above, UIPL 15-86 did not clearly distinguish between
work-relief and work-training. The following listing is intended to
clarify their distinguishing characteristics. No attempt is made to
list names of programs that fall under the definitions given in this
UIPL since the characteristics of the program will determine whether
or not they must be covered.
A. Both of the following characteristics must be present in
either work-relief or work-training:
(1) the employer-employee relationship is based more on the
participants' and communities' needs than normal economic
considerations such as increased demand or the filling of a bona
fide job vacancy;
(2) the products or services are secondary to providing
financial assistance, training, or work-experience to individuals to
relieve them of their unemployment or poverty or to reduce their
dependence upon various measures of relief, even though the work may
be meaningful or serve a useful public purpose.
B. A work-relief or work-training program must have one or more
of the following characteristics:
(1) the wages, hours, and conditions of work are not
commensurate with those prevailing in the locality for similar work;
(2) the jobs did not, or rarely did, exist before the program
began (other than under similar programs) and there is little
likelihood they will be continued when the program is discontinued;
(3) the services furnished, if any, are in the public interest
and are not otherwise provided by the employer or its contractors;
and
(4) the jobs do not displace regularly employed workers or
impair existing contracts for services.
C. The following characteristic must be present only for work-
relief programs:
The qualifications for the jobs take into account as
indispensable factors the economic status, i.e., the standing
conferred by income and assets, of the applicants.
6. Action Required. State agency administrators are requested to
provide this UIPL to appropriate staff.
7. Inquiries. Direct questions to your Regional Office.
RESCISSIONS: UIPL 15-86
EXPIRATION DATE: Continuing
U.S. Department of Labor
Employment and Training Administration, Washington, D.C. 20210
CLASSIFICATION: UI
CORRESPONDENCE SYMBOL: TEUL
DATE: 09/25/96
DIRECTIVE: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 37-96
TO: ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM: MARY ANN WYRSCH, Director, Unemployment Insurance Service
SUBJECT: The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996
1. Purpose. To advise the States of amendments made to Federal
law by the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 which affect the Federal-State
Unemployment Compensation (UC) program.
2. References. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (P.L. 104-193); the Internal Revenue Code
of 1986 (IRC), including the Federal Unemployment Tax Act (FUTA);
the Social Security Act (SSA); Unemployment Insurance Program
Letters (UIPLs) No. 37-86 and 23-96; and Office of Management and
Budget (OMB) Circular No. A-87 (60 Fed. Reg. 26484, May 17, 1995).
3. Background. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (PRWORA), P.L. 104-193, was enacted on
August 22, 1996. This legislation, popularly known as the ``welfare
reform'' bill, made several changes which affect the UC program.
These changes--
Establish New Hire Directories at both the State and
National levels,
Require that certain UC information be provided to
State/National New Hire Directories,
Require that States collect quarterly wage reports from
State and local governmental entities and ``labor organizations,''
Authorize State and local child support enforcement
agencies to disclose UC data to an agent,
Require State and local child support agencies to
obtain access to UC information for establishing paternity and other
purposes,
Affect the eligibility of aliens, and
Address the intercept of food stamp overissuances.
This UIPL provides information on these amendments and advises
States of those instances where amendments to State UC law are
needed to meet Federal UC law requirements. This UIPL does not,
however, address those amendments relating to the eligibility of
aliens. After completing its analysis of the amendments relating to
aliens, the Department will issue guidance to the States as
appropriate.
4. State Directory of New Hires (``State Directory'')--Section
453A, SSA, as added by Section 313(b), PRWORA. The PRWORA replaced
the Aid to Families with Dependent Children program with the
Transitional Assistance to Needy Families (TANF) program. A State's
TANF grant is conditioned on meeting certain requirements, including
a requirement that the State operate a child support enforcement
program. As part of the child support enforcement program, the State
must operate a Directory of New Hires by October 1, 1997. This
Directory must contain the name, address, and social security number
of each newly hired individual and the name, address, and Federal
employer identification number of the hiring employer. (Section
453(b)(1), SSA, as amended.) If a State chooses to use its UC agency
as the collection point for the State Directory, the UC agency will
need to meet any conditions for such Directory established by the
PRWORA as interpreted by the Secretary of Health and Human Services
(HHS).
If the UC agency maintains the State Directory and uses the
State Directory for UC purposes, UC grant funds may be used to pay
UC costs associated with the Directory consistent with OMB Circular
No. A-87. However, UC grants may not be used to pay for any costs of
providing State Directory information to the TANF agency or to the
National New Hires Directory discussed below.
New Section 453A(g)(2)(B), SSA, specifically references Federal
UC law--
Wage and Unemployment Compensation Information.--The State
Directory of New Hires shall, on a quarterly basis, furnish to the
National Directory of New Hires extracts of the reports required
under section 303(a)(6) to be made to the Secretary of Labor
concerning the wages and unemployment compensation paid to
individuals, by such dates, in such format, and containing such
information as the Secretary of Health and Human Services shall
specify in regulations.
In other words, as a condition of receiving its TANF grant, the
State Directory must obtain certain information from the UC agency
and furnish that information to the Secretary of HHS. This
requirement for the transfer of data is effective October 1, 1997.
(Section 453A(a)(1)(B), SSA, as amended.) Section 303(a)(6), SSA,
requires States to make ``such reports as the Secretary of Labor may
from time to time require.'' \1\ Under Section 453(i), SSA, as
amended by the PRWORA, the above information is required to be
transmitted from the State Directory to the National Directory of
New Hires.
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\1\ The Secretary does not currently require the submittal of
data on individuals under Section 303(a)(6), SSA. However, as
discussed below, both the FUTA and SSA have been amended to require
UC agencies to provide wage and claim information to the State
Directory.
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5. National Directory of New Hires (``National Directory'')--
Section 453(i), SSA, as amended by Section 316, PRWORA. Section 453,
SSA, requires the Secretary of HHS to establish and conduct a
Federal Parent Locator Service (FPLS). The mission of the FPLS is to
obtain and transmit to any authorized person (as defined under
Section 453(c)) information as to the whereabouts of any absent
parent. This information is to be used to locate the parent for the
purpose of enforcing child support obligations.
[[Page 57716]]
As a result of the PRWORA, the FPLS is now charged with
establishing and maintaining a National Directory of New Hires no
later than October 1, 1997. The National Directory will consist of
new hire information as well as information supplied ``pursuant to
section 453A(g)(2),'' SSA, as quoted in part above. The Conference
Report for the PRWORA explains that--
When fully implemented the Federal Directory of New Hires will
contain identifying information on virtually every person who is
hired in the United States. In addition, the FPLS [Directory of New
Hires] will contain quarterly data supplied by the State Directory
of New Hires on wages and Unemployment Compensation paid. * * * The
information is to be used for purposes of locating individuals to
establish paternity, and to establish, modify, or enforce child
support orders. [H. Rep. 104-725, as quoted in the Congressional
Record for July 30, 1996, page H8918.]
As this National Directory contains information which may be in
the files of the State UC agency, two amendments concerning the
provision of this information were made to Federal UC law. First,
Section 314(g)(2), PRWORA, amended Section 3304(a)(16), FUTA, to
provide, as a condition of a State law being certified for tax
credit that--
(A) wage information contained in the records of the agency
administering the State law which is necessary (as determined by the
Secretary of Health and Human Services in regulations) for purposes
of determining an individual's eligibility for assistance, or the
amount of such assistance, under a State program funded \2\ under
part A of title IV of the Social Security Act, shall be made
available to a State or political subdivision thereof when such
information is specifically requested by such State or political
subdivision for such purposes,
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\2\ The bolded language commencing with ``eligibility'' was
inserted by Section 110(k)(2), PRWORA, as a conforming amendment. It
recognizes the repeal of the AFDC program and the creation of the
TANF program.
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(B) wage and unemployment compensation information contained in
the records of such agency shall be furnished to the Secretary of
Health and Human Services (in accordance with regulations
promulgated by such Secretary) as necessary for the purposes of the
National Directory of New Hires established under section 453(i) of
the Social Security Act, and
(C) such safeguards are established as are necessary (as
determined by the Secretary of Health and Human Services in
regulations) to insure that information furnished under subparagraph
(A) or (B) is used only for the purposes authorized under such
subparagraph; [New language bolded.]
Second, Section 316(g)(2), PRWORA, amended Section 303(h),
SSA,\3\ to provide, as a condition of States receiving
administrative grants for their UC programs, that--
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\3\ Prior to amendment, Section 303(h), SSA, required State UC
agencies to ``take such actions * * * as may be necessary to enable
the Secretary of Health and Human Services to obtain prompt access
to any wage and unemployment compensation claims information'' for
purposes of carrying out the child support enforcement program. See
UIPL 11-89.
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(1) The State agency charged with the administration of the
State [UC] law shall, on a reimbursable basis--
(A) disclose quarterly, to the Secretary of Health and Human
Services, wage and claim information, as required pursuant to
section 453(i)(1) [establishing the National Directory], contained
in the records of such agency;
(B) ensure that information provided pursuant to subparagraph
(A) meets such standards relating to correctness and verification as
the Secretary of Health and Human Services, with the concurrence of
the Secretary of Labor, may find necessary; and
(C) establish such safeguards as the Secretary of Labor
determines are necessary to insure that information disclosed under
subparagraph (A) is used only for purposes of section 453(i)(1) in
carrying out the child support enforcement program under title IV.
(2) Whenever the Secretary of Labor, after reasonable notice and
opportunity for hearing to the State agency charged with the
administration of the State law, finds that there is a failure to
comply substantially with the requirement of paragraph (1), the
Secretary of Labor shall notify such State agency that further
payments will not be made to the State until the Secretary of Labor
is satisfied that there is no longer any such failure. Until the
Secretary of Labor is so satisfied, the Secretary shall make no
future certification to the Secretary of the Treasury with respect
to the State.
(3) For purposes of this subsection--
(A) the term ``wage information'' means information regarding
wages paid to an individual, the social security account number of
such individual, and the name, address, State, and the Federal
employer identification number of the employer paying such wages to
such individual; and
(B) the term ``claim information'' means information regarding
whether an individual is receiving, has received, or has made
application for, unemployment compensation, the amount of such
compensation being received (or to be received by such individual),
and the individual's current (or most recent) home address.
Although the amendment to the FUTA, is less specific, both
amendments have the same effect: The State UC agency must provide
certain information to the National Directory. Specifically ``wage
information'' and ``claim information'' as defined in Section
303(h)(3), SSA, must be supplied on a quarterly basis. The UC agency
is required to supply only wage and claim information which is
already contained in its records. It is not required to obtain
additional information for purposes of the National Directory.
The SSA amendment requires that the State must provide such
safeguards as the Secretary of Labor determines are necessary to
determine that the information is used only for the purposes of the
National Directory of New Hires. However, the FUTA amendment
provides that the Secretary of HHS will establish such safeguards.
The Department of Labor will be studying this matter, in conjunction
with the Department of HHS, to determine what, if any, safeguards
individual States must establish prior to providing the FPLS with UC
information.
Costs of Providing Information. Under amended Section 303(h),
SSA, UC information will be provided to the National Directory ``on
a reimbursable basis.'' Section 453(e)(2) provides that the costs of
providing information to the Secretary of HHS ``shall be
reimbursed'' to ``any State.'' Section 453(g), SSA, describes what
amounts ``may'' reimbursed to the States:
Reimbursement for Reports by State Agencies.--The Secretary may
reimburse Federal and State agencies for the costs incurred by such
entities in furnishing information requested by the Secretary under
this section in an amount which the Secretary determines to be
reasonable payment for the information exchange (which amount shall
not include payment for the costs of obtaining, compiling, or
maintaining the information). [Emphasis added.]
In brief, the States are not required to disclose UC information
under Section 303(h) unless they are reimbursed by the Secretary of
HHS. However, the Secretary of HHS has sole authority to determine
the amount to be reimbursed. If the Secretary of HHS does not
reimburse the State for what the State determines to be the entire
cost of providing UC information, Federal funds provided for the
administration of the State's UC program may not be used to make up
the difference. Under section 303(a)(8), SSA, UC grants may be used
only for the proper and efficient administration of the State's UC
law, which does not include the costs of disclosing this
information.
Effective date for UC conformity provisions. Under new Section
453(a)(1), SSA, each State is required to establish a State
Directory effective October 1, 1997. (States which already have
State Directories are given until October 1, 1998, to meet the
requirements of Section 453A, except that the State must transmit
information to the National Directory effective October 1, 1997.)
Under Section 453(i), SSA, the FPLS is required to establish and
maintain a National Directory by October 1, 1997.
However, Section 395(a)(2), PRWORA provides that ``all other
provisions of this title [pertaining to the Directories] shall
become effective upon the date of enactment.'' Section 395(b)
further provides that:
Grace Periods For State Law Changes.--The provisions of this
title shall become effective with respect to a State on the later
of--
(1) the date specified in this title, or
(2) the effective date of laws enacted by the legislature of
such State implementing such provisions, but in no event later than
the 1st day of the 1st calendar quarter beginning after the close of
the 1st regular session of the State legislature that begins after
the date of the enactment of this Act. For purposes of the previous
sentence, in the case of a State that has a 2-year legislative
session, each year of such session shall be deemed to be a separate
regular session of the State legislature.
Thus, notwithstanding the requirement that the State and
National Directories be
[[Page 57717]]
operative on October 1, 1997, States which need to amend their UC
laws may qualify for a grace period which extends beyond this date
to the first day of the first calendar quarter following the close
of the first regular session of the State legislature. Since each
year of a legislative session is deemed a separate session and since
all annual sessions will adjourn by December 31, 1997, this means
all States qualifying for a grace period must be in a position to
provide wage and claim information to the National Directory by
January 1, 1998.\4\
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\4\ Section 395(c), PRWORA, provides for a longer grace period
if the State needs to amend its Constitution. This longer grace
period will end at the earlier of (1) one year after the effective
date of the necessary State constitutional amendment or (2) 5 years
after the date of enactment of the PRWORA.
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States will need to review their UC laws and regulations to
determine if disclosure to the National Directory is permissible. If
it is not, States must take all actions necessary to ensure that the
information will be disclosed.
6. State UC Agency Access to State Directory--Section
453A(h)(3), SSA, as added by Section 313(b), PRWORA. Provision of
Information in National Directory to State UC Agency--Section
453(k), SSA, as added by Section 316(f), PRWORA. New Section
453A(h)(3), SSA, requires, as a condition of a State receiving a
TANF grant, that access to the State Directory be provided to State
employment security (that is, UC and employment service) agencies:
Administration of Employment Security and Workers'
Compensation.--State agencies operating employment security and
workers' compensation programs shall have access to information
reported by employers pursuant to subsection (b) [that is, New Hire
data] for the purposes of administering such programs.
New Section 453A(h)(2), SSA, contains an identical provision
requiring the granting of access to a State agency responsible for
administering a program specified in Section 1137(b), SSA,
pertaining to the Income Eligibility Verification System. Paragraph
(3) of Section 1137(b), specifies the UC program. Therefore,
additional authority exists for requiring the granting of access to
UC agencies.
The PRWORA does not address how the costs of a UC agency
accessing a State Directory will be determined. The allowability of
these costs for UC grant purposes is governed by OMB Circular No. A-
87.
States should be aware that, under new Section 453(n), SSA, (as
added by Section 316(f), PRWORA), Federal departments, agencies and
instrumentalities are required to submit certain information to the
National Directory:
Federal Government Reporting.--Each department, agency, and
instrumentality of the United States shall on a quarterly basis
report to the Federal Parent Locator Service the name and social
security number of each employee and the wages paid to the employee
during the previous quarter, except that such a report shall not be
filed with respect to an employee of a department, agency, or
instrumentality performing intelligence or counterintelligence
functions, if the head of such department, agency, or
instrumentality has determined that filing such a report could
endanger the safety of the employee or compromise an ongoing
investigation or intelligence mission.
In addition, new Section 453A(b)(1)(C), SSA, requires Federal
entities to report new hire information:
Federal Government Employers.--Any department, agency, or
instrumentality of the United States shall comply with subparagraph
(A) [requiring employers to furnish new hire information] by
transmitting the report described in subparagraph (A) to the
National Directory of New Hires * * *
As this information may be useful for UC purposes, the
Department will be discussing its potential uses with the Department
of HHS. States should be aware that the Secretary of HHS has the
sole authority for determining the extent, if any, to which any
information in the National Directory may be shared with State UC
agencies.\5\ In the event that States may obtain such information,
Section 453(K)(3), SSA, addresses costs for providing information
from the National Directory--
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\5\ Section 453(1), SSA, as added by Section 316(f), PRWORA,
limits the use of information ``in the Federal Parent Locator
Service,'' which includes information in the National Directory. The
information in the Federal Parent Locator Service ``shall not be
used or disclosed, except as expressly provided'' in Section 453,
SSA. Section 453(j)(3)(B), SSA, also added by Section 316(f),
PRWORA, authorizes the Secretary of HHS to disclose information in
the directories to ``State agencies.'' Under Section 453(j)(3),
these agencies are limited to TANF and child support agencies.
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FOR INFORMATION FURNISHED TO STATE AND FEDERAL AGENCIES.--A
State or Federal agency that receives information from the Secretary
[of HHS] pursuant to this section shall reimburse the Secretary for
costs incurred by the Secretary in furnishing the information, at
rates which the Secretary determines to be reasonable (which rates
shall include payment for the costs of obtaining, verifying,
maintaining, and comparing the information). [Emphasis added.]
Thus, the Secretary of HHS has the sole authority for
determining what fees will be paid by State UC agencies for any
information obtained from the National Directory.
7. Income Eligibility Verification System--Amendment to Section
1137(a)(3), SSA, made by Section 313(c)(1), PRWORA. Section 303(f),
SSA, requires a State to operate an income eligibility verification
system (IEVS) which meets the requirements of Section 1137(a), SSA.
Section 1137(a)(3) requires employers ``to make quarterly wage
reports to a State agency'' which may be the State UC agency. The
PRWORA amended the SSA to expand the types of employers required to
submit quarterly wage reports while at the same time allowing an
exception. As a result Section 1137(a)(3) now reads, in part, as
follows--
employers (including State and local governmental entities and labor
organizations (as defined in section 453A(a)(2)(B)(iii)) [sic--
should probably be (ii)] in such State are required * * * to make
quarterly wage reports to a State agency (which may be the agency
administering the State's unemployment compensation law) except that
the Secretary of Labor (in consultation with the Secretary of Health
and Human Services and the Secretary of Agriculture) may waive the
provision of this paragraph if he determines that the State has in
effect an alternative system which is as effective and timely for
purposes of providing employment related income and eligibility data
for the purposes described in paragraph (2), and except that no
report shall be filed with respect to an employee of a State or
local agency performing intelligence or counterintelligence
functions, if the head of such agency has determined that filing
such a report could endanger the safety of the employee or
compromise an ongoing investigation or intelligence mission;
[Amendments bolded.]
New Section 453A(a)(2)(B)(ii), SSA, as added by Section 313(b),
PRWORA, provides that ``labor organization''--
shall have the meaning given such term in section 2(5) of the
National Labor Relations Act, and includes any entity (also known as
a ``hiring hall'') which is used by the organization and an employer
to carry out requirements described in section 8(f)(3) of such Act
of an agreement between the organization and the employer.''
Section 2(5) of the National Labor Relations Act (NLRA) defines
``labor organization'' as--
any organization of any kind, or any agency or employee
representation committee or plan, in which employees participate and
which exists for the purpose, in whole or in part, of dealing with
employers concerning grievances, labor disputes, wages, rates of
pay, hours of employment, or conditions of work.
Section 8(f)(3) of the NLRA pertains to agreements covering
employees in the building and construction industry under which the
employer notifies the labor organization ``of opportunities for
employment with such employer, or gives such labor organization an
opportunity to refer qualified applicants for such employment.''
As a result of the amendments to Section 1137(a)(3), SSA, all
States must require State and local governments and the labor
organizations described above to submit quarterly wage reports to a
State agency which may be the UC agency. States will need to examine
their laws and regulations to determine if any amendments are
necessary. Also as a result of the amendments to Section 1137(a)(3),
SSA, States are prohibited from requiring the filing of a report
concerning an employee who is performing ``intelligence or counter
intelligence functions'' if the head of a State or local agency
employing the individual determines that the filing of such a report
``could endanger the safety of the employee or compromise an ongoing
investigation or intelligence mission.''
UC agencies should be aware that Section 409(a)(4), SSA, as
amended by Section 103(a), PRWORA, provides that, if the Secretary
of HHS determines that a State TANF program is not participating
during a fiscal year in the IEVS as required, the
[[Page 57718]]
Secretary of HHS will reduce the State's TANF grant for the
following fiscal year by up to 2 percent.
The effective date of the amendment to Section 1137(a)(3), SSA,
is the date of enactment of the PRWORA. (Section 395(a)(2), PRWORA.)
However, if the State must amend its law to require such reporting,
the effective date is the effective date of the law enacted by the
State legislature, but in no case later than January 1, 1998.
(Section 395(b)(2), PRWORA. See item 5 of this UIPL for an
explanation of this January 1, 1998 effective date.)
8. Use of UC Information for Child Support Enforcement
Purposes--Section 303(e), SSA, as amended by Section 313(d), PRWORA.
Section 303(e), SSA, among other things, requires States to provide
certain UC information to child support enforcement agencies. The
PRWORA added the following new paragraph to the end of Section
303(e)--
(5) A State or local child support enforcement agency may
disclose to any agent of the agency that is under contract with the
agency to carry out the purposes described in paragraph (1)(B)
[i.e., for purposes of establishing and collecting child support
obligations from, and locating, individuals owing such obligation]
wage information that is disclosed to an officer or employee of the
agency under paragraph (1)(A) [i.e., a state or local child support
enforcement agency]. Any agent of a State or local child support
agency that receives wage information under this paragraph shall
comply with the safeguards established pursuant to paragraph (1)(B).
[Emphasis added.]
Section 303(a)(1), SSA, requires that State law contain ``[s]uch
methods of administration * * * as are found by the Secretary of
Labor to be reasonably calculated to insure full payment of
unemployment compensation when due.'' This provision has long been
interpreted to prohibit, with certain exceptions, disclosure of
claimant and employer UC information. Although disclosure to public
officials in the performance of their duty has been permitted,
disclosure to private entities without the consent of the individual
is generally not allowed. (See UIPL 23-96.)
The amendment partially removes this restriction on disclosure
to private entities for purposes of Section 303(e), SSA. Federal law
now authorizes a State UC agency to provide UC information to a
State or local child support agency which turns that information
over to a private contractor for purposes of establishing and
collecting child support obligations from, and locating, individuals
owing such obligations. This authorization is contingent on the
existence of safeguards consistent with Section 303(e)(1)(B), SSA,
as determined in regulations issued by the Secretary of Labor. The
Secretary of Labor has not yet prescribed regulations on these
safeguards. Therefore, until these regulations are issued, States
will assure compliance with Section 303(e)(1)(B) by following the
confidentiality protection provisions of 20 CFR 603.7 pertaining to
requesting agencies.
A State wishing to use this new authority will need to determine
whether its UC law must be amended. The amendment to Section 303(e),
SSA, is effective on the date of enactment of the PRWORA.
9. Use of Employment Security Information to Establish Paternity
and for Other Purposes--Section 466(c)(1), SSA, as added by Section
325(a)(2), PRWORA. Section 466(c)(1), SSA, requires that State and
local child support enforcement agencies use certain expedited
procedures relating ``to the establishment of paternity or to
establishment, modification, or enforcement of support orders. * *
*'' One of these procedures is obtaining access to employment
security records--
(D) Access to Information Contained in Certain Records.--To
obtain access, subject to safeguards on privacy and information
security, and subject to the nonliability of entities that afford
such access under this subparagraph, to information contained in the
following records (including automated access, in the case of
records maintained in automated data bases):
* * * * *
(V) employment security records. * * *
Federal UC law was not amended to require State UC agencies to
provide such access. Specifically, Section 303(e), SSA, relating to
the provision of UC information to child support agencies was not
amended. However, Section 303(e)(1)(A), SSA, already requires that
wage information be disclosed, upon request and on a reimbursable
basis, to child support agencies. Also, Section 303(a)(1), SSA,
permits disclosure of UC information, including claim information,
to public officials in the performance of their duties.
States will need to review their UC laws and regulations to
determine if granting access to child support agencies--subject to
safeguards, nonliability and payment of any costs associated with
granting such access--requires amendment to State UC law to
accommodate the child support agency.
10. Food Stamp Overissuances--Section 13(b)(1) of the Food Stamp
Act of 1977 (FSA) as amended by Section 844(a), PRWORA. Under
Section 303(d)(2), SSA, ``uncollected overissuances'' of food stamp
allotments may be intercepted from an individual's UC under certain
limited conditions. See UIPL 37-86 for a complete explanation of
these conditions.
Although the PRWORA did not amend Section 303(d)(2), SSA, it did
amend Section 13(b)(1) of the FSA to require that a State Food Stamp
agency must now collect any overissuance of food stamp coupons
issued ``to a household'' by withholding amounts from UC payable to
``a member of the household''\6\ as provided under Section 13(c),
FSA, which establishes certain procedures for the food stamp agency.
Under subsection (2) of Section 13(b), FSA, the Secretary of
Agriculture may waive this requirement under certain conditions.
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\6\ Under Section 13(a)(2), FSA, ``[e]ach adult member of a
household shall be jointly and severally liable for the value of any
overissuance of coupons.'' Since food stamps are allotted to
households, this means every adult member of the household may be
liable for the overissuance.
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Section 13(b)(1), FSA, does not affect the requirements of
Section 303(d)(2), SSA. It merely mandates that State food stamp
agencies take an action that previously was optional under the FSA
and that is permitted under the SSA.
As all State laws contain provisions which prohibit attachment
of UC, States which have not already enacted provisions implementing
Section 303(d)(2), SSA, will need to amend their UC laws to
accommodate the State food stamp agency. The following draft
language will, as adjusted for State usage, assure UC conformity
requirements are met:
(1)(a) An individual filing a new claim for unemployment
compensation shall, at the time of filing such claim, disclose
whether or not he or she owes an uncollected overissuance (as
defined in section 13(c)(1) of the Food Stamp Act of 1977) of food
stamp coupons. The commissioner shall notify the State food stamp
agency enforcing such obligation of any individual who discloses
that he or she owes child support obligations and who is determined
to be eligible for unemployment compensation.
(b) The commissioner shall deduct and withhold from any
unemployment compensation payable to an individual who owes an
uncollected overissuance--
(A) the amount specified by the individual to the commissioner
to be deducted and withheld under this clause,
(B) the amount (if any) determined pursuant to an agreement
submitted to the State food stamp agency under section 13(c)(3)(A)
of the Food Stamp Act of 1977; or
(C) any amount otherwise required to be deducted and withheld
from unemployment compensation pursuant to section 13(c)(3)(B) of
such Act.
(c) Any amount deducted and withheld under this section shall be
paid by the commissioner of the appropriate State food stamp agency.
(d) Any amount deducted and withheld under subsection (b) shall
for all purposes be treated as if it were paid to the individual as
unemployment compensation and paid by such individual to the State
food stamp agency as repayment of the individual's uncollected
overissuance.
(e) For purposes of this section, the term ``unemployment
compensation'' means any compensation payable under this Act
including amounts payable by the commissioner pursuant to an
agreement under any Federal law providing for compensation,
assistance, or allowances with respect to unemployment.
(f) This section applies only if arrangements have been made for
reimbursement by the State food stamp agency for the administrative
costs incurred by the commissioner under this section which are
attributable to the repayment of uncollected overissuances to the
State food stamp agency.
As State food stamp agencies must reimburse the State UC agency
for the administrative costs incurred in intercepting food stamps
(Section 303(d)(2)(D), SSA), State UC agencies may not perform any
food stamp intercept activities without entering into an agreement
for reimbursement of all costs which will be incurred by such
activities. (UIPL 37-86, page 4.)
[[Page 57719]]
If the State food stamp agency does not wish the State UC agency
to perform all the activities listed in Section 303(d)(2), SSA, the
State UC agency need only perform those activities for which it is
paid. For example, if the State food stamp agency does not wish the
UC agency to require applicants for UC is to disclose whether an
overissuance is owed, then the State UC agency need not do so.
11. Action. Each State must take appropriate action to assure
that its law authorizes the disclosure of UC wage and claim
information to the National Directory of New Hires. State UC
agencies which maintain State wage record files will need to assure
that State and local governmental entities and labor organizations
submit quarterly wage reports as required. UC agencies are
encouraged to cooperate with other State agencies in implementing
the requirements of the PRWORA.
12. Inquiries. Please direct inquiries to the appropriate
Regional Office.
RESCISSIONS: None
EXPIRATION DATE: Continuing
[FR Doc. 96-28656 Filed 11-6-96; 8:45 am]
BILLING CODE 4510-30-M
