[Federal Register Volume 60, Number 91 (Thursday, May 11, 1995)]
[Rules and Regulations]
[Pages 25560-25569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11617]
[[Page 25559]]
_______________________________________________________________________
Part VI
Department of Labor
_______________________________________________________________________
Employment and Training Administration
_______________________________________________________________________
20 CFR Part 625
Disaster Unemployment Assistance Program; Interim Final Rule; Request
for Comments
Federal Register / Vol. 60, No. 91 / Thursday, May 11, 1995 / Rules
and Regulations
[[Page 25560]]
DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 625
RIN 1205-AA50
Disaster Unemployment Assistance Program; Interim Final Rule;
Request for Comments
AGENCY: Employment and Training Administration, Labor.
ACTION: Interim final rule; request for comments.
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SUMMARY: The Employment and Training Administration of the Department
of Labor is issuing this interim final rule, effective upon
publication, amending 20 CFR 625.6 to remove restrictive provisions,
provide a more equitable weekly assistance amount to individuals
unemployed as a result of a major disaster, and to clarify and simplify
the States' administration of the Disaster Unemployment Assistance
Program. To provide an opportunity for public participation in this
rulemaking, a comment period is provided, and a final rule will be
published after taking into account any comments that are received.
DATES: Effective date: The effective date of this interim final rule is
May 11, 1995.
Comment date: Written comments on this interim final rule must be
received in the Department of Labor on or before July 10, 1995.
ADDRESSES: Written comments on this interim final rule may be mailed or
delivered to Mary Ann Wyrsch, Director, Unemployment Insurance Service,
Employment and Training Administration, U.S. Department of Labor, Room
S4231, 200 Constitution Avenue, NW., Washington, DC 20210.
All comments received will be available for public inspection
during normal business hours in Room S4231 at the above address.
Copies of this interim final rule are available in the following
formats: electronic file on computer disk and audio tape. They may be
obtained at the above office.
FOR FURTHER INFORMATION CONTACT:
Robert Gillham, Group Chief, Federal Programs Group, Division of
Program Development and Implementation, Office of Program Management in
the Unemployment Insurance Service at the address listed under
ADDRESSES: Telephone (202) 219-5312 (this is not a toll-free number).
SUPPLEMENTARY INFORMATION: Section 410(a) of The Robert T. Stafford
Disaster Relief and Emergency Assistance Act (hereafter the ``Stafford
Act'') (42 U.S.C. 5177) sets forth the outlines of the Disaster
Unemployment Assistance Program (hereafter the ``DUA Program''). The
President is authorized by section 410(a) of the Stafford Act to
provide to any individual unemployed as a result of a major disaster
declared by the President under the Stafford Act ``such benefit
assistance as he deems appropriate while such individual is unemployed
for the weeks of such unemployment with respect to which the individual
is not entitled to any other unemployment compensation * * * or waiting
period credit.'' Other terms of section 410(a) provide that disaster
unemployment assistance (hereafter ``DUA'') is to be furnished to
individuals for no longer than 26 weeks after the major disaster is
declared; and that for any week of unemployment of DUA payment is not
to exceed the maximum weekly benefit amount (hereafter ``WBA'')
authorized under the unemployment compensation (hereafter ``UC'') law
of the State in which the disaster occurred.
Pursuant to a delegation of authority (51 FR 4988, Feb. 10, 1986)
to the Secretary of Labor from the Director of the Federal Emergency
Management Agency (hereafter ``FEMA''), the DUA Program authorized by
section 410(a) of the Stafford Act is implemented in regulations
promulgated by the Department of Labor (hereafter ``Department'') and
published at part 625 of title 20 of the Code of Federal Regulations.
The amendments made by this interim final rule are applicable for
all major disasters declared on and after its effective date.
Summary of Major Provisions/Amendments to Sec. 625.6
First, the amendments retain the current provisions of
Sec. 625.6(a)(1) to utilize earnings from employment or self-employment
in a base period to compute a DUA WBA. However, new Sec. 625.6(a)(2)
provides that for purposes of a DUA WBA computation, the most recent
tax year that has ended will be considered as the base period to be
utilized in computing a DUA WBA under Sec. 625.6(a)(1). Only in certain
circumstances does a tax year coincide with the State law base period,
which, under the current provisions, requires the projection of net
income by the individual for certain periods, which may not be
accurate.
Second, under new Sec. 625.6(a)(3), adult family members employed
or self-employed as a family unit or in the same self-employment
business or trade will be treated equally in allocating wages from such
employment or self-employment where all performed services. Under the
current provisions, income may be allocated only to one individual
because of the manner in which the family was paid or based on the
manner which a tax return was filed even though all adult individuals
in the family may have participated in the employment or self-
employment. This will permit DUA to be paid to each adult family member
who participates in a family business.
Third, the up to four-step process to compute a DUA WBA under
Secs. 625.6(a) (2) through (5) is eliminated. It is replaced with new
Sec. 625.6(b) to pay 50 percent of the average weekly UC amount as the
DUA WBA to all individuals who worked full-time but have insufficient
wages to compute a weekly amount under Sec. 625.6(a)(1), or are
entitled to a DUA WBA less than 50 percent of the average weekly UC
amount as computed under the basic computation method in
Sec. 625.6(a)(1). The payment of 50 percent of the average weekly UC
amount as a minimum DUA WBA (with certain adjustments) is a significant
increase in the DUA WBA for many affected workers. Currently, the
minimum DUA WBA is generally the minimum UC weekly amount; however, in
certain cases where earnings are less than the minimum amount needed to
qualify under the State UC law, the DUA WBA may be computed at less
than the State UC minimum amount under the current provisions of
Sec. 625.6(a)(3). In these cases, individuals are often not eligible
for DUA because of the limitation imposed by the application of
Sec. 625.6(a)(5) that the DUA WBA may not exceed 70 percent of the
individual's average weekly wage.
Fourth, newly added Sec. 625.6(b)(1) provides that adjustments will
be made to reduce the minimum DUA WBA determined in accordance with
Sec. 625.6(b) for workers employed part-time prior to the date they
became unemployed due to the major disaster. However, if the DUA WBA
computed under Sec. 625.6(a)(1) is higher than the reduced DUA WBA
computed under paragraph (b)(1), the higher amount shall be paid.
Fifth, while the above provisions address the calculation of an
individual's DUA WBA based on employment and wages earned prior to the
disaster, new Sec. 625.6(f)(1) provides that wages earned after the
disaster may reduce the DUA payments for the weeks in which those wages
were earned. If an individual earns wages in a week during which DUA is
claimed, the amount [[Page 25561]] payable for that week is the DUA WBA
reduced in accordance with the earnings allowance provisions of the
applicable State law. This is the same provision that was previously
set forth at Sec. 625.6(d). However, new Sec. 625.6(f)(2) provides that
gross earnings received from the self-employment business during a week
by a self-employed individual will be deducted only during the week
received. No longer will there be a projection of future income to be
deducted on a pro rata basis from each week's benefits, which often
disqualified individuals from receiving any DUA.
Sixth, newly added Sec. 625.6(e) provides that an immediate
determination of a DUA WBA will be made based on the applicant's
statement of wages and employment or self-employment, or a combination
of the applicant's statement and documentation to support the
employment or self-employment and wages, or State agency records.
However, if the determination is based on the individual's statement
only, the individual must provide evidence of employment or self-
employment or wages within 21 calendar days. Failure to do so will
result in a denial of DUA. Section 625.6(e) also provides for certain
adjustments to the DUA WBA if partial information is submitted by an
individual within 21 days and for a later adjustment when necessary
documentation to support a redetermination is submitted.
Background--Basis for Amendments
The weekly amount computation methodology set forth in section
625.6, Disaster Unemployment Assistance: Weekly Amount, was last
revised and published in the Federal Register as a final rule on
September 16, 1977 (42 FR 46712). The section was amended, however, by
an interim final rule published in the Federal Register on January 5,
1990 (55 FR 550) and confirmed in a final rule published in the Federal
Register on May 16, 1991 (56 FR 22800) only to incorporate the amended
definition of ``State'' set forth in amended Sec. 625.2(p). At the time
of the 1977 final rule, the current section 410 of the Stafford Act was
section 407 of the Disaster Relief Act of 1974 (hereafter ``DRA''). The
Disaster Relief and Emergency Assistance Amendments of 1988 (Pub. L.
100-107, November 23, 1988) redesignated section 407 as section 410 and
the short title of the DRA was changed to the Stafford Act. Among the
amendments to section 407 included in the newly designated section 410
were the deletion of a provision that provided that the weekly DUA
amount would be reduced by the amount of any UC available to the
individual, and the addition of the provision that if an individual is
eligible for UC, such individual is not eligible for DUA. This former
provision provided the basis for the methods of the computation of a
weekly DUA amount under Sec. 625.6. At the time the interim final rule
was confirmed in the May 16, 1991, final rule, the Department was not
aware of any problems with the States' administration of Sec. 625.6 or
of any inconsistencies in the weekly amounts of DUA paid. Therefore, no
amendments were made to the computation methodology provided in the
section.
The Department's most recent guidance to the States for
administering the provisions of Sec. 625.6 for unemployed self-employed
individuals was set forth in Unemployment Insurance Program Letter
(hereafter ``UIPL'') No. 35-87, issued August 25, 1987. The UIPL
contained several key instructions. First, a self-employed individual
did not have to be totally unable to perform customary services in
self-employment as a direct result of the disaster in order to be
eligible for DUA, but could be determined eligible if he/she were
partially unemployed, where there was a substantial reduction in the
customary services that could be performed each week as a direct result
of the disaster. Second, the DUA WBA for an unemployed self-employed
individual would be computed under Sec. 625.6 based on the net earnings
shown on the individual's Federal income tax return for the year
preceding the beginning date of the disaster. Third, reductions from
the DUA WBA for partial or part-total unemployment, as provided in
Sec. 625.6(d), would be based on net earnings. Fourth, such net
earnings for a week would be determined by the individual filing an
affidavit stating what his/her anticipated net earnings would be for
the taxable year in which the disaster occurred, and such net earnings
would be prorated to a fixed weekly amount and deducted from the DUA
WBA in accordance with the earnings allowance applicable under State
law. If the individual projected no net earnings, no reduction would
occur. If the prorated net earnings equaled or exceeded the weekly
amount of DUA payable, application of the State law earnings allowance
provisions prevented the individual from being eligible for any DUA
payments even where the individual was only partially employed a few
hours each week. Fifth, if more than one family member claimed DUA
based on the same self-employment business, each individual's self-
employment income had to be supported by the previous year's Federal
tax return showing separate SE schedules, and if a husband and wife
operated the business as a partnership, there would have to exist a
form 1065 filed with the IRS and a schedule K-1 to show how the
partnership income or loss was to be allocated, in order for both
individuals to be eligible for DUA. Simply filing a joint tax return
was not sufficient for purposes of determining DUA entitlement for all
family members.
The Department's recent experience with the DUA Program pointed out
unnecessary complexities, inconsistencies and problems with certain
provisions in Sec. 625.6 and the implementing instructions in UIPL No.
35-87. This experience stemmed from several major disasters declared
from 1993 to 1994. These major disasters were: the Midwest States which
were declared major disaster areas due to flooding occurring during the
late spring and summer of 1993; the Northridge, California area
earthquake in January, 1994; the March, 1994, major disasters declared
in several Southeastern States due to severe storms and flooding; and
most recently, the salmon fishing disaster beginning in May, 1994, in
California, Oregon and Washington. Principally, these unnecessary
complexities, inconsistencies, and problems arose from: the diversity
of occupations and unemployment situations for thousands of unemployed
individuals, particularly the unemployed self-employed; the
unavailability of individuals' tax and business records because they
were lost due to the disasters, except for the salmon fishers; and the
fact that many thousands of individuals were partially unemployed as a
result of the disasters.
The current DUA regulations at Sec. 625.6(a) provide an up to 5-
step process to compute a DUA WBA: (1) Determined a WBA based on
earnings (net income for the self-employed) during the State's UC base
period and then apply the State's UC benefit formula; (2) if the amount
determined under (1) is less than the average amount of UC paid in the
State, and a higher amount can be determined based on the individual's
average weekly wage for the 13-week period immediately preceding the
date of the disaster, the higher amount will be the DUA WBA; (3) if an
amount cannot be computed under (1), then the weekly wage earned or
that would have been earned in employment or self-employment in the 13-
week period preceding the date of [[Page 25562]] the disaster is
utilized; (4) if, under (1) or (3), it is impossible to compute a WBA
for a self-employed individual because there were not net earnings, the
individual is entitled to the minimum UC WBA paid in the State; (5) any
amount computed under (2) or (3) may not exceed 70 percent of the
individual's average weekly wage, and if the result is a WBA less than
the minimum paid in the State, the individual is ineligible for DUA.
For the self-employed, as provided in UIPL No. 35-87, and for some
workers, using steps (2) or (3) requires a projection of income. This
problem is compounded for the self-employed, in that net income is for
a year and has to be divided by 52 to determine net earnings for the
13-week period.
In addition to the complexities of the current computation, there
are inconsistencies. One inconsistency arises in computing a DUA WBA
for individuals (workers or self-employed) who have minimal wages
versus a self-employed individual with no wages (net income). Under
Sec. 625.6(a)(4), an unemployed self-employed individual with no net
income (and who meets other eligibility requirements) is entitled to
the minimum WBA under State law. But Sec. 625.6(a)(5) provides that a
weekly amount determined under Sec. 625.6(a) (2) or (3) (which provide
for alternate methods of calculation based on earnings in a 13-week
period) must not exceed 70 percent of the average weekly earnings of
the individual in the 13-week period prior to the individual's
unemployment, and if the application of this limitation results in a
weekly amount less than the minimum UC weekly amount, the individual is
not eligible for DUA. Therefore, if a wage earner or self-employed
individual has $1.00 in wages up to the minimum UC qualifying amount
during the 13-week period, he/she is usually not entitled to DUA,
because the 70 percent limitation imposed by Sec. 625.6(a)(5) often
causes the individual to be ineligible for DUA. As a result, an
individual with minimal wages may not be eligible for DUA, but a self-
employed individual with no wages is entitled to DUA.
Another inconsistency arises under the provisions of Secs. 625.6
(b) and (c) (computations for the South Pacific island jurisdictions,
which are defined as ``States'' under Sec. 625.2(p)) when compared to
the computation methodology under Secs. 625.6(a) (3) and (4).
Paragraphs (b) and (c) provide for a uniform DUA WBA equal to the
average UC weekly amount paid under all State UC laws or another
uniform amount that is determined at the time of the disaster.
Therefore, the weekly amount paid in the South Pacific island
jurisdictions is significantly higher than what is paid to a self-
employed individual with no net income or to an individual with minimal
earnings in the rest of the States. The amendments made by this interim
final rule will not, however, entirely eliminate the inconsistency of
paying a higher weekly DUA amount to claimants in the South Pacific
island jurisdictions. This problem is further discussed below.
Inconsistencies also arise under Sec. 625.6(d) in computing
reductions from the WBA for partial and part-total employment during a
week for the self-employed. Section 625.6(d) provides that a reduction
will occur for wages earned during the week by applying the wages and
earnings allowance for partial and part-total employment prescribed
under the State UC law. Under the instructions in UIPL No. 35-87, if a
self-employed individual resumes some of his/her customary self-
employment activities, a projection must be made of the individual's
self-employment net income for the year taking into account any losses
due to the disaster which will adversely affect the farmer's future
income. This is because the self-employed often perform services for
their income year round, but may receive actual income only once or
twice a year.
Net income for the self-employed farmer must include any projected
or actual payments received for crop insurance proceeds or disaster
relief paid by the U.S. Department of Agriculture (hereafter ``USDA'')
because such payments are considered income for Federal income tax
purposes and are paid in lieu of being able to fully harvest a crop for
income. This annualized figure is divided by 52 to determine the weekly
income, and this weekly income figure is deducted from the DUA WBA. If
the self-employed individual projects no net income, no deduction is
made.
In many cases, the computed deductible amount is equal to or
greater than the WBA; therefore, no DUA is payable even though the
individual may have been able to work only a few hours each week. On
the other hand, a wage earner working less than full-time may receive a
full or partial DUA weekly payment since all State UC laws permit a
certain amount of income to be earned before any deduction is made from
the WBA.
The Department realized, as a result of the Midwest floods, the
California earthquake, the Southeast floods, the salmon fishing
disaster, and the thousands of partially unemployed self-employed
individuals affected by them, that the provision in Sec. 625.6(d)
requiring a reduction for wages earned and its position (as set forth
in UIPL No. 35-87) that a self-employed individual must project net
income is overly complex and may contribute to the improper payment or
denial of DUA. A self-employed individual's projected net income is
often only an ``estimate'' that may or may not be accurate. Such an
``estimate'' may result in an improper payment to a self-employed
individual determined eligible or an improper denial of DUA to an
individual determined not eligible.
Accordingly, the Department has consulted with FEMA and USDA and
solicited comments on proposed changes to the regulations from the
States. The majority of the States commented that the simplification of
the weekly monetary computation, in order to remove or reduce the
inequities described above, should have priority. The Department, FEMA
and USDA considered the comments and the Department has incorporated
many of the States' specific comments in the amendments to Sec. 625.6
described below, such as the payment of 50 percent of the average UC
amount as the minimum DUA amount and elimination of the current
provisions in Secs. 625.6(a) (2) through (5). The Department concurs
that the amendments should have priority and should be implemented as
rapidly as possible.
Changes to 20 CFR 625.6
Section 625.6 is amended in its entirety as set forth and discussed
below.
The heading of Sec. 625.6 is amended to read, Weekly Amount;
Jurisdictions; Reductions, which reflects the contents and provisions
of the section more accurately than the current heading.
Section 625.6(a) provides that the weekly amount of DUA for all
States, except the South Pacific island jurisdictions, shall be the
same as computed under the State UC law for regular compensation and
the amount so computed shall not exceed the maximum WBA for UC
authorized under the applicable State law. This is the same provision
as is currently in the first part of Sec. 625.6(a)(1). However, the
amendments add three new paragraphs to Sec. 625.6(a) that clarify and
simplify the computations made under this section and reduce or
eliminate the potential for improper DUA payments or fraudulent
applications.
Newly added paragraph (a)(1) reads nearly the same as the proviso
in current paragraph (a)(1). That is, the amended regulation continues
to provide that in computing an individual's DUA WBA, the qualifying
employment and wage [[Page 25563]] requirements of the applicable State
UC law and the benefit formula of the applicable State UC law shall be
applied, except for computations as provided under new paragraphs
(a)(2) or (b) (discussed below). The State UC law base period is no
longer applicable.
In addition, the provision, in current paragraph (a)(1), that wages
``shall not include employment or self-employment, or wages earned or
paid for employment or self-employment, which is contrary to or
prohibited by any Federal law'' is retained. For clarification, and as
an example of the application of this provision, new paragraph (a)(1)
cites section 3304(a)(14)(A) of the Federal Unemployment Tax Act
(hereafter ``FUTA'') (26 U.S.C. 3304(a)(14)(A)) as one of the Federal
law provisions which is included in this exclusion. The Department's
long-standing position on the administration of this FUTA provision as
it relates to services performed by an alien is set out in UIPLs No. 1-
86 (51 FR 10102, August 20, 1986), 12-87 (54 FR 10102), 12-87, Change 1
(54 FR 10113) and 6-89 (54 FR 10116), all published on March 9, 1989.
The Department's position and applicability of section 3304(a)(14)(A),
FUTA, to the DUA Program was also set forth in the preamble to the DUA
final rule published May 16, 1991 (56 FR 22800).
Newly added paragraph (a)(2) provides that for all individuals,
whether they are self-employed, or are individuals with a combination
of income from self-employment and remuneration for services performed
for another, or are wage earners only, the base period to be utilized
to determine the DUA WBA shall be the most recent tax year that has
ended for the individual prior to the individual's unemployment that
was a direct result of the major disaster. The reasons for this
amendment are as follows.
Most State UC laws provide that the base period utilized in
determining monetary entitlement for a UC claim is the first four of
the five completed calendar quarters preceding the filing quarter.
Therefore, if an individual becomes unemployed in April, May, or June,
the base period is the prior calendar year, which, for individuals, is
also a tax year. If an individual becomes unemployed in a later quarter
in the current year, it results in a different base period which, for
some individuals, means that a projection of income has to be made for
the quarters outside the most recent tax year. This will result in a
projection which may or may not be accurate. An individual who became
unemployed in the January-March quarter would have to provide
information from a tax year prior to the most recent calendar year in
order for the State agency to properly compute a DUA WBA. In addition,
the tax year for certain self-employed individuals, depending on filing
status, is different than a calender year. This causes additional
problems when projecting income for a State UC law base period.
Therefore, in order to reduce errors by eliminating income
projections and provide a more easily administered provision, the
Department has determined that the most recently completed tax year for
the individual preceding the individual's unemployment that was a
direct result of the major disaster will be the base period to be
utilized in computing the DUA WBA, rather than the State UC law base
period.
The self-employment income to be considered wages (as defined in
Sec. 625.2(u)) shall be all the net income that was reported on the tax
return that was dependent on the performance of services in all self-
employment. This provision eliminates problems that occurred where the
net income reported on the individual's tax year return for the year
preceding the beginning date of the disaster under the instructions in
UIPL No. 35-87 did not coincide with the State UC law base period. The
individual's projection of net income for the periods outside the tax
year may not have included all self-employment net income from services
performed in two or more businesses, but only the net income from those
businesses affected by the disaster. This may have limited State agency
use of base period self-employment in computing a DUA WBA. This
inconsistency could occur because Sec. 625.2(t) defines ``unemployed
self-employed individual'' as an individual who was self-employed in or
was to commence self-employment in the major disaster area at the time
the major disaster began, and whose principal source of income and
livelihood is dependent upon that self-employment, and whose
unemployment is caused by a major disaster.
Inclusion of all net income derived from the performance of
services in all self-employment parallels the inclusion of all wages
earned in covered employment by wage earners on a State UC claim and in
covered and noncovered employment on a DUA claim by an unemployed
worker, and is in accordance with the provisions of Sec. 625.6(a)(1).
Using all net income from the performance of all services in self-
employment will lessen the burden on State agency personnel to perform
analytical activities more associated with income tax auditors in
attempting to split out income from one business when reviewing tax
returns or other business records. Base period (tax year) income from
sources not requiring the performance of services, such as interest,
dividends, and capital gains from the sale of investments (or stock
portfolios) is not to be included for self-employed individuals, just
as it is not included as wages in determining entitlement to UC, since
no services are performed. Since these sources of income are reported
separately on the tax return, their exclusion from base period income
is not difficult.
However, any net income during the tax year base period derived
from the business, such as income derived when a self-employed farmer
receives crop insurance or disaster relief payments for the loss of a
crop, is income that must be included. This is because such payments
are made in lieu of income that would have been received from the
harvest of the crops.
Inclusion of all net income from the performance of services in
self-employment derived from any business carried on by such individual
follows the definition of ``net earnings from self-employment'' in
section 1402(a) of the Internal Revenue Code of 1986 (26 U.S.C.
1402(a)).
The Department also recognizes that some individuals may not have
completed their tax returns at the time of their unemployment due to
the major disaster; however, such individuals will be entitled to a DUA
WBA determined in accordance with paragraph (e)(3) of this section,
discussed below.
In addition, the Department recognizes that to utilize wages in the
most recently completed tax year for the individual preceding the
individual's unemployment as a direct result of the major disaster as
the base period for computing a DUA WBA under Sec. 625.6(a) could
result in the use of wages not representative of the income an
individual is currently receiving at the time his/her unemployment
begins. The most recently completed tax year base period may result in
some individuals receiving a lower DUA WBA than if more current wages
were used. However, since all individuals who are fully employed or
self-employed prior to their unemployment as a direct result of the
major disaster will, at a minimum (unless reduced for disqualifying
income or because of pre-disaster partial employment or partial self-
employment), receive 50 percent of the average State UC weekly amount
as their DUA WBA, they will receive a reasonable DUA WBA that will
permit them to temporarily provide for their [[Page 25564]] needs.
Therefore, no individual will suffer significant harm. Also, the most
recently completed tax year base period provision was established in
the interest of simplifying the administration of the DUA Program and
reducing or eliminating the potential for determining an incorrect or
improper DUA WBA.
The Department, however, invites interested parties to suggest
provisions that would use more recent wages in an alternate base period
where this would provide a higher DUA WBA than the use of wages in the
most recently completed tax year. Specifically, comments are requested
on what would be an appropriate alternate base period without having to
utilize income projections and in which the wages (net income for the
self-employed) could be easily substantiated by the individual and
easily verified by the State agency.
Newly added paragraph (a)(3) of this section provides a rule for
the allocation of income in cases where several family members work in
a business. It provides that, as of the date of filing an initial
application for DUA, if family members who are over the age of
majority, as defined under the statutes of the applicable State, were
customarily or routinely employed or self-employed as a family unit or
in the same self-employment business prior to the date the individuals
became unemployed as a direct result of the major disaster, the wages
from such employment or net income from self-employment shall be
allocated equally among such adult family members for purposes of
computations of the DUA WBA. There is an exception provided. If the
documentation substantiating employment or self-employment and wages
from such employment or self-employment, submitted in accordance with
new Sec. 625.6(e), justifies a different allocation, it will be used
rather than the equal allocation.
The Department recognizes that in many self-employment ventures
adult members of a family, particularly husbands and wives, may jointly
own the business or trade and share equally in performing services
resulting in the success or failure of the business, yet may never have
formally entered into a partnership or filed form 1065 or schedule K-1,
which reflects the distribution of income, with the Internal Revenue
Service as part of their tax return. Therefore, the Department
concludes that to restrict the allocation of income only to those
situations where a partnership exists, as proven by the schedule K-1,
is overly restrictive and has prevented the payment of DUA to
individuals otherwise entitled.
In addition, the Department recognizes that in certain occupations,
particularly in agriculture, it is common for family members to work as
a unit for an employer, yet only one member of the family is paid by
the employer. The family member that is paid then divides the wages
between the other family members or uses such wages to provide for all
the family members' needs and expenses. Paragraph (a)(3) clarifies the
Department's position that all adult family members who performed
services should be treated equally in the allocation of income for
purposes of computing a DUA weekly amount.
The term ``family,'' as used for purposes of determining a DUA WBA,
is not limited to the traditional family of husband, wife, and
children, but includes any family members related by blood, adoption,
or marriage who customarily work as a family unit.
However, the Department also recognizes that members of a family
under the age of majority often perform services in employment and
self-employment for family units or family businesses, particularly in
the agricultural industry. Such employment or self-employment is
usually performed during periods such individuals are not attending
school and may be full-time during vacation or between term periods,
and part-time or not at all during times that school is in session. The
fact that such individuals are under the age of majority does not, in
itself, mean these individuals are not entitled to DUA. These
individuals would be entitled to DUA if they meet the definition of
unemployed worker or unemployed self-employed individual at Secs. 625.2
(s) and (t) and the eligibility requirements for a week of unemployment
in Sec. 625.4.
For these reasons, paragraph (a)(3) also provides that, for
purposes of computing a DUA WBA for an individual under the age of
majority, the actual wages earned or received during the base period in
employment or self-employment are utilized, rather than an equal
allocation of the wages as provided for family members over the age of
majority.
The Department also recognizes that in many family businesses,
particularly in the agricultural industry, individuals under the age of
majority may not be paid wages as payment for services that are
performed, but may be paid an allowance or receive a percentage of the
proceeds resulting from a product or livestock that is sold. Therefore,
such individuals may not have any tax returns, bank accounts, or other
business records to support their statement of employment and earnings,
as would the business owner or employer. Such individuals may provide
an affidavit from an adult family member, which is duly certified
before an official, such as a notary public, or have the adult family
member provide a signed statement, under penalty of perjury, to a State
agency representative, substantiating that they performed services and
received the amount of the allowance or proceeds as payment. If the
individuals have other documentation substantiating their employment,
the affidavit or adult family member statement is not necessary. In
these cases, the State agency must give careful consideration to
whether the individual meets the definitions of ``unemployed worker''
or ``unemployed self-employed individual'' in Secs. 625.2 (s) and (t),
respectively.
Newly added Sec. 625.6(b) provides that if the DUA weekly amount
computed under paragraph (a) for an individual is less than 50 percent
of the average weekly payment of regular UC paid in the State, or if an
individual has insufficient or no wages in the base period to compute a
DUA weekly amount, the individual shall be entitled to a weekly amount
equal to 50 percent of the average weekly UC payment in the State. Any
individual whose weekly DUA amount is determined under paragraph (b)
must submit documentation to substantiate employment or self-
employment, or wages paid or earned for such employment or self-
employment, or documentation to substantiate that the disaster
prevented planned commencement of employment or self-employment. Such
documentation must be submitted within 21 calendar days from the date
of application for DUA. If such individual fails to provide such
documentation, he/she will be denied DUA.
This provision provides a significant increase in the minimum DUA
amount payable (in most cases, from the minimum payable under the State
UC law to 50 percent of the average payable). In addition, it reduces
the inconsistency between the DUA weekly amount established for the
South Pacific island jurisdictions (as discussed previously) and the
other States. Elimination of the inconsistency is discussed below. A
remaining inconsistency is that the South Pacific island jurisdictions
use a uniform weekly DUA amount, while the other States treat the
proposed DUA minimum as a floor that can be exceeded if justified by
prior earnings. In addition, newly added Sec. 625.6(b) also ensures
that individuals having minimal [[Page 25565]] earnings ($1.00 up to
the minimum needed to qualify under the State UC law), or no wages (no
net income in the case of the self-employed), will be entitled to a
weekly DUA amount.
The Department has determined that to set the minimum weekly DUA
amount at 50 percent of the average weekly UC amount paid in a State is
sufficient to permit unemployed individuals to temporarily provide for
the necessities of living. Workers whose prior wages justify a higher
weekly DUA amount will receive more, up to the State's maximum weekly
amount for regular compensation. Most State UC laws establish the
weekly UC amounts based on a percentage of the average weekly wage paid
in the State, taking into consideration the labor force, geography and
other factors unique to the State. Therefore, the Department has
determined that a minimum DUA payment in a State equal to 50 percent of
the average UC weekly amount paid in the State is an amount that will
allow for the temporary needs of unemployed individuals to provide for
certain necessities of living, which, as discussed below, may be
reduced for individuals who are customarily or routinely employed or
self-employed less than full-time.
Section 625.6(b)(1) provides that if an individual was customarily
or routinely employed or self-employed less than full-time prior to
his/her unemployment as a direct result of the major disaster, such
individual's weekly amount shall be determined based on the percentage
of time the individual was employed or self-employed compared to the
customary and usual hours per week that would constitute full-time
employment or self-employment in the occupation. The State agency will
determine what constitutes full-time employment based on information
requested from the applicant and State agency records or occupational
and labor market information. An exception is provided if an individual
employed or self-employed less than full-time has base period earnings
that would result in the computation of a DUA WBA under paragraph (a)
that is less than 50 percent of the average UC weekly amount but is
greater than the DUA WBA computed under paragraph (b)(1). In this case,
the individual will be paid the higher weekly amount.
The purpose of this provision is to prevent payment of 50 percent
of the average UC weekly amount to an individual who was employed or
self-employed less than full-time prior to the major disaster. This
provision prevents an individual from receiving a DUA WBA exceeding the
wages received for such employment or self-employment. The Department
recognizes, and FEMA and the State agencies have also expressed
concern, that if the minimum DUA weekly amount is too high, it works as
a disincentive for the individual to seek and return to work. For
example, assume a college student works 20 hours per week at the hourly
wage of $4.25 for a weekly wage of $85.00. This individual becomes
unemployed as a direct result of a major disaster, and is dependent
upon the employment as his/her principal source of income and
livelihood. If the minimum DUA weekly payment (50 percent of the
average UC payment) is $90.00 per week in the State, such amount
exceeds the weekly wages for his/her employment. Therefore, if 40 hours
per week is considered full-time employment for the occupation by the
State agency, the individual's DUA weekly amount would be established
at $45.00 (20 hours is 50 percent of 40 hours, and 50 percent of $90.00
equals $45.00). That amount is a more equitable income replacement for
the services performed and provides an income to the individual in the
same kind of relationship to the income received from the job, as a
full weekly amount is to the income received by an individual who
worked full-time.
Section 625.6(b)(2) provides that if the DUA WBA computed under
paragraph (b)(1) is not an even dollar amount, the amount will be
rounded in accordance with the rounding provisions for regular UC under
the applicable State law.
Sections 625.6 (c) and (d) are redesignated from current paragraphs
(b) and (c) and otherwise remain unchanged. These paragraphs provide
for determining the DUA WBA for the South Pacific island jurisdictions.
The provisions of newly added paragraphs 625.6 (e) and (f) (discussed
below) also are applicable to individuals filing for DUA in those South
Pacific island jurisdictions.
The Department is considering issuing a notice of proposed
rulemaking, which would propose two amendments to Sec. 625.6 to reduce
the DUA WBA in the South Pacific island jurisdictions. One amendment
would provide that the DUA WBA established under Sec. 625.6(c) for Guam
and the Commonwealth of the Northern Mariana Islands would be more akin
to the amount determined under paragraph (b) for the remainder of the
States (i.e., 50 percent of the average weekly UC amount paid in each
State). For the remainder of the jurisdictions at Sec. 625.6(d), the
DUA WBA would remain at 50 percent of the area-wide average of weekly
wages paid to individuals in those jurisdictions. Amending Sec. 625.6
in accordance with the above proposal would eliminate the inconsistency
of unemployed workers in Guam and the Commonwealth of the Northern
Mariana Islands receiving a higher DUA WBA than many unemployed workers
in the other States.
The second proposed amendment would set forth in Sec. 625.6(b)(1)
that an individual in any South Pacific island jurisdiction would be
subject to a reduction to his/her determined DUA WBA if he/she were
employed or self-employed less than full-time prior to his/her
unemployment as a direct result of the major disaster. The reason for
including South Pacific islanders under Sec. 625.6(b)(1) is to achieve
consistency and uniformity across jurisdictions.
The Department has decided not to provide for the above amendments
in this interim final rule because to do so would reduce benefits to
some individuals in the South Pacific island jurisdictions, should a
major disaster be declared, without notice and an opportunity for
comments prior to the effective date of the rule, which is the date of
publication.
Newly added Sec. 625.6(e) sets forth that the State agency shall
immediately determine a DUA WBA under the provisions of paragraphs (a)
through (d) based on the individual's statement of employment or self-
employment and the wages earned or paid for each employment or self-
employment. In addition, an immediate determination of a DUA WBA will
be made if, at the time of filing for DUA, the individual submits
documentation substantiating employment or self-employment or wages
earned or paid for such employment or self-employment, or if the State
agency has records of employment or self-employment and wages earned or
paid. An immediate determination shall also be made based on the
individual's statement or in conjunction with the submittal of
documentation in those cases where the individual was to commence
employment or self-employment on or after the date the major disaster
began but was prevented from doing so as a direct result of the major
disaster.
Section Sec. 625.6(e)(1) provides that if entitlement is based only
on the individual's statement, the individual must furnish
documentation to substantiate such employment or self-employment and/or
wages earned or paid for such employment or self-employment. In
addition, documentation must be submitted in those cases where the
individual was to commence employment or self-employment at the time of
the disaster, but was prevented from commencing it [[Page 25566]] as a
direct result of the major disaster. The documentation must be
submitted within 21 calendar days of the filing of the DUA initial
application.
Section Sec. 625.6(e)(2) provides that if an individual fails to
submit, within 21 days, sufficient documentation to establish that he/
she was employed or self-employed in the major disaster area prior to
his/her unemployment as a direct result of the major disaster, or was
to commence employment or self-employment on or after the date the
major disaster began but was prevented from doing so as a direct result
of the disaster, the individual shall be ineligible for the payment of
DUA for any week of unemployment due to the major disaster. In
addition, if the individual received payments of DUA for any weeks of
unemployment prior to the date of the determination of ineligibility,
such weeks shall be considered overpaid and a determination will be
issued establishing the overpayment. The State agency shall also
consider whether the individual should be subject to a disqualification
for fraudulently filing an initial application for DUA.
The primary purpose for these provisions (Secs. 625.6(e)(1) and
(e)(2)) is to provide for the prompt payment of benefits to those
affected by a major disaster while also protecting against fraudulent
claims for DUA. The Department's position is that, given the
disruptions caused by a major disaster, it is important to provide
financial relief in affected areas as quickly as possible. It also is
necessary to be sure that benefits are being paid only to those who are
eligible for them. Thus, the regulations provide for the quick
determination and payment of benefits based on the applicant's
representation. Once conditions have stabilized, however, it is
reasonable to require documentation substantiating that an individual
meets the eligibility conditions, i.e., was employed or self-employed
or was to commence employment or self-employment in the disaster area
at the time he/she became unemployed as a direct result of the major
disaster. The documentation to prove employment or self-employment
would not have to consist of detailed income data, such as income tax
records or W-2 forms, which may have been lost or destroyed because of
the disaster, but could, for example, simply consist of a statement
from a bank that the individual had a business account or an account
with payroll deposit, or a copy of a title or deed to property, or any
other simple evidence that could easily be obtained within 21 days. In
those cases where an individual was to commence employment or self-
employment, the documentation could simply consist of a statement from
the employer indicating the date employment was to start or when a
self-employment contract for services was to start.
Section 625.6(e)(3) provides that, for purposes of DUA WBA computed
under paragraph (a), if an individual submits documentation to verify
his/her employment or self-employment within 21 calendar days of the
filing of the initial application for DUA, but not documentation to
support his/her statement of wages earned or paid during the base
period, the DUA WBA shall be immediately redetermined in accordance
with the provisions in paragraph 625.6(b). This includes those
instances where an individual has not filed a tax return for the most
recent tax year that has ended.
The purpose of paragraph (e)(3) is to ensure that if an individual
has stated that he/she has earnings that result in a computation of a
weekly DUA amount higher than 50 percent of the average UC amount paid
in the State, the individual must support the statement by providing
documentation of his/her earnings within a reasonable time. This rule
will prevent a significant amount of incorrect or improper payments
from occurring and prevent a large overpayment from being established
against the individual. The Department views 21 calendar days as a
reasonable time frame for the individual to contact sources and obtain
acceptable proof of income. Examples of acceptable forms of proof are
bank records, employer statements of earnings, income tax preparer
copies of documents, and State and/or Federal income tax returns.
An individual who planned to commence employment or self-employment
but was prevented because of the major disaster would have to produce
the same forms of proof as other individuals if the individual had base
period employment. However, the Department recognizes that many
individuals who were about to commence employment or self-employment
may not have had any employment prior to the date of unemployment. Such
individuals could only be determined entitled to a weekly amount under
the provisions of paragraph (b) of this section. The Department also
recognizes that these individuals may have expected to have had
earnings that would have resulted in a DUA WBA higher than 50 percent
of the average UC weekly amount, had they been included in a base
period. However, the Department's position is that there is no basis to
project what the individual might have received in future earnings and
apply such amount to the base period utilized for computations under
Sec. 625.6(a). There is no assurance the individual would have the
earnings projected for various reasons such as closure of the business
or termination from employment, or, in the case of the self-employed,
business expenses may exceed projections, or income may not result as
planned. In other words, individuals who were prevented from commencing
employment or self-employment have not proven the same attachment to
the workforce as have individuals who were employed or self-employed
prior to their unemployment as a direct result of the major disaster.
Therefore, the payment of 50 percent of the average UC weekly amount to
an individual who had no income prior to the employment or self-
employment he/she was to commence is reasonable.
If an individual fails to submit proof within 21 days, the State
agency generally would not have processed more than three weeks of
payments of DUA at the higher amount; hence, any overpayment
established as a result of the recomputation would be minimal and could
be more readily offset against future amounts payable, causing minimal
hardship to the individual. Conversely, the applicant's records
submitted within 21 calendar days may result in the individual being
entitled to a higher DUA WBA and an adjustment must be made for the
underpaid weeks. This rule will also provide such individuals with a
steadier income stream.
Section 625.6(e)(4) provides that if an individual has had his/her
DUA WBA redetermined in accordance with paragraph (e)(3) because the
required wage documentation was not submitted within 21 calendar days,
such individual may have his/her DUA WBA redetermined upon submittal of
documentation prior to the end of the disaster assistance period to
substantiate that the wages earned or paid during the base period would
be sufficient to compute a DUA WBA higher than was redetermined under
paragraph (b). This provision will benefit all individuals who were
unable to obtain and submit base period wage documentation with 21
days. This provision will particularly accommodate those individuals
who had not filed a tax return at the time of application for DUA by
allowing such individuals up to 26 weeks to submit a copy of a tax
return filed for the most recent tax year. Any higher weekly amount
determined would be applicable to all weeks for which the individual
was eligible for the payment of DUA. [[Page 25567]]
Newly added Sec. 625.6(f)(1) sets forth, for partial and part-total
unemployed workers and unemployed self-employed individuals, the
current methodology that is prescribed in Sec. 625.6(d) for reducing
the weekly amount of DUA payable. It requires that the weekly amount of
DUA payable shall be reduced (but not below zero) by the amount of
wages earned in that week as determined by applying to such wages the
earnings allowance for partial or part-total employment prescribed in
the applicable State UC law for partial or part-total employment by
individuals received regular UC.
Newly added Sec. 625.6(f)(2) provides that the weekly DUA amount
payable to an unemployed self-employed individual shall also be reduced
(but not below zero) by the full amount of any income received during
the week that was based on the performance of services in self-
employment by applying the earnings reduction allowance provided in
paragraph (f)(1). Paragraph (f)(2) also provides that, notwithstanding
the definition of ``wages'' at Sec. 625.2(u), the term ``any income''
for purposes of this paragraph means gross income.
The basis for the reductions in paragraph (f)(2) of this section
derive from the fact that the definition of a ``week of employment''
for an unemployed self-employed individual at Sec. 625.2(w)(2) does not
take into consideration that in the case of many self-employed,
particularly farmers, all income for year round performance of services
may be paid in one or two weeks. The instructions in UIPL No. 35-87
attempted to reconcile the problem by having the individual project
his/her net income for the year, then prorate such amount to each week
and deduct the amount from the DUA WBA for each week claimed. The
result of this, as discussed previously, was that, in many cases, the
projected prorated weekly amount exceeded the DUA WBA and the
individual received no DUA, even though such individual was unemployed
and had no income from any source.
The Department believes it is far more equitable, and will provide
weekly DUA payments to a greater number of individuals, to deduct from
the DUA WBA the gross earnings received during a week that were or are
derived from the performance of services in self-employment, than to
attempt to have the individual determine or project net earnings for a
year from the income and then prorate such annual figure to each week.
Application of this new provision means, for example, in the case
of a farmer, that if the farmer sold some product(s) during a week and
received $30,000.00 in gross income, the individual would be ineligible
for DUA for that week only, and then he/she could continue to receive
DUA in subsequent weeks provided the eligibility requirements of
Sec. 625.4 are met. However, if the net income for tax purposes to be
derived from the $30,000.00, plus any additional projected net income
to be received during the tax year, were prorated to 52 weeks and
deducted from the amount of DUA payable, it may mean the individual is
not entitled to any DUA for any week because of excessive earnings each
week. Likewise, if a self-employed individual performed services prior
to becoming unemployed due to the major disaster and is receiving
monthly installment payments of, for example, $50.00, such amount would
be deducted from the DUA WBA during the week received.
The Department recognizes that application of the reduction
provisions in paragraph (f)(2) of Sec. 625.6 will result in no
reduction being made for weeks of unemployment after the individual's
unemployment as a direct result of the major disaster where the
individual performs less than full-time self-employment but has no
income during the week. Therefore, the Department is considering
issuing a notice of proposed rulemaking, which would amend Sec. 625.6
to reduce the DUA WBA based on the hours an individual performed less
than full-time services in self-employment during the week compared to
the individual's usual or customary full-time hours performing
services. This amendment is not being made in this interim final rule
because self-employed individuals affected by such an amendment would
receive less benefits without opportunity for comment prior to the
effective date of this rule should a major disaster be declared.
Publication in Interim Final; Effective Date
The Department has determined, pursuant to 5 U.S.C. 553(b)(B), that
good cause exists for publishing the amendments to 20 CFR 625.6 as an
interim final rule with a post-publication comment period, because a
pre-publication comment period is impracticable and contrary to the
public interest. It is impractical because major disasters continue to
occur, which means that thousands of individuals will again be
unemployed and applying for DUA if areas in the States or entire States
are declared major disaster areas by the President. To not have the
regulations in place at that time would be contrary to the public
interest because of the inconsistencies and unduly restrictive
provisions in the current regulations. In addition, there is little
likelihood that the majority of any potential beneficiaries will object
to the changes since they provide more equitable and, in most cases,
greater benefits.
For all of the reasons stated above, the Department has determined,
pursuant to 5 U.S.C. 553(d)(3), that good cause exists for making the
amendments to 20 CFR 625.6 effective upon publication in the Federal
Register. Such amendments are applicable to all major disasters
declared by the President on or after the date of publication and will,
therefore, cover any major disaster in the spring or summer.
Historically, these are the seasons of the year when most major
disasters occur because of the prevalence of severe storms, floods,
tornadoes, and hurricanes.
Drafting Information
This document was prepared under the direction and control of the
Director, Unemployment Insurance Service, Employment and Training
Administration, U.S. Department of Labor, 200 Constitution Avenue, NW.,
Washington, DC 20210: Telephone (202) 219-7831 (this is not a toll-free
number).
Classification--Executive Order 12866
The interim final rule in this document is classified as a
``significant regulatory action'' under Executive Order 12866 on
Federal Regulations. It may: (1) Materially alter the budgetary impact
of entitlements or the rights and obligations of recipients thereof; or
(2) raise novel legal or policy issues arising out of legal mandates
and the President's priorities. It is not likely to result: (3) in
having an annual effect on the economy of $100 million or more; or (4)
create a serious inconsistency or interfere with action taken or
planned by another agency.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.
3501 et seq., approval has been obtained from the Office of Management
and Budget (OMB) for the recordkeeping and reporting requirements under
20 CFR 625.16(a) for the DUA forms ETA 90-2, 81, 81A, 82, 83, and 84.
The OMB control number for the 90-2 is 1205-0234, and for the 81, 81A,
82, 83, and 84 it is 1205-0051. OMB approval has also been obtained for
the recordkeeping and reporting required under 20 CFR
[[Page 25568]] 625.19(b) under OMB control number 1205-0051.
Regulatory Flexibility Act
No regulatory flexibility analysis is required where the rule
``will not * * * have a significant economic impact on a substantial
number of small entities'' (5 U.S.C. 605(b)). The definition of the
term ``small entity'' under 5 U.S.C. 601(6) does not include States.
Since these regulations involve an entitlement program administered by
the States, and are directed to the States, no regulatory flexibility
analysis is required. The Secretary has certified to the Chief Counsel
for Advocacy of the Small Business Administration to this effect.
Catalog of Federal Domestic Assistance Number
This program is listed in the Catalog of Federal Domestic
Assistance at No. 17. 225, ``Disaster Unemployment Assistance
(DUA).''
Lists of Subjects in 20 CFR Part 625
Disaster Unemployment Assistance, Labor, Reemployment services,
Unemployment compensation.
Signed at Washington, DC, on May 4, 1995.
Doug Ross,
Assistant Secretary of Labor.
For the reasons set out in the preamble, part 625 of title 20, Code
of Federal Regulations, is amended as set forth below.
PART 625--DISASTER UNEMPLOYMENT ASSISTANCE
1. The authority for part 625 continues to read as follows:
Authority: 42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5201(a);
Executive Order 12673 of March 23, 1989 (54 FR 12571); delegation of
authority from the Director of the Federal Emergency Management
Agency to the Secretary of Labor, effective December 1, 1985 (51 FR
4988); Secretary's Order No. 4-75 (40 FR 18515).
2. Section 625.6 is revised to read as follows:
Sec. 625.6 Weekly amount; jurisdictions; reductions.
(a) In all States, except as provided in paragraphs (c) and (d) of
this section, the amount of DUA payable to an unemployed worker or
unemployed self-employed individual for a week of total unemployment
shall be the weekly amount of compensation the individual would have
been paid as regular compensation, as computed under the provisions of
the applicable State law for a week of total unemployment. In no event
shall such amount be in excess of the maximum amount of regular
compensation authorized under the applicable State law for that week.
(1) Except as provided in paragraph (a)(2) or (b) of this section,
in computing an individual's weekly amount of DUA, qualifying
employment and wage requirements and benefit formula of the applicable
State law shall be applied; and for purposes of this section,
employment, wages, and self-employment which are not covered by the
applicable State law shall be treated in the same manner and with the
same effect as covered employment and wages, but shall not include
employment or self-employment, or wages earned or paid for employment
or self-employment, which is contrary to or prohibited by any Federal
law, such as, but not limited to, section 3304(a)(14)(A) of the Federal
Unemployment Tax Act (26 U.S.C. 3304(a)(14)(A)).
(2) For purposes of paragraph (a)(1) of this section, the base
period to be utilized in computing the DUA weekly amount shall be the
most recent tax year that has ended for the individual (whether an
employee or self-employed) prior to the individual's unemployment that
was a direct result of the major disaster. The self-employment income
to be treated as wages for purposes of computing the weekly amount
under this paragraph (a) shall be the net income reported on the tax
return of the individual as income from all self-employment that was
dependent upon the performance of services by the individual. If an
individual has not filed a tax return for the most recent tax year that
has ended at the time of such individual's initial application for DUA,
such individual shall have a weekly amount determined in accordance
with paragraph (e)(3) of this section.
(3) As of the date of filing an initial application for DUA, family
members over the age of majority, as defined under the statutes of the
applicable State, who were customarily or routinely employed or self-
employed as a family unit or in the same self-employment business prior
to the individuals' unemployment that was a direct result of the major
disaster, shall have the wages from such employment or net income from
the self-employment allocated equally among such adult family members
for purposes of computing a weekly amount under this paragraph (a),
unless the documentation to substantiate employment or self-employment
and wages earned or paid for such employment or self-employment
submitted as required by paragraph (e) of this section supports a
different allocation. Family members under the age of majority as of
the date of filing an initial application for DUA shall have a weekly
amount computed under this paragraph (a) based on the actual wages
earned or paid for employment or self-employment rather than an equal
allocation.
(b) If the weekly amount computed under paragraph (a) of this
section is less than 50 percent of the average weekly payment of
regular compensation in the State, as provided quarterly by the
Department, or, if the individual has insufficient wages from
employment or insufficient or no net income from self-employment (which
includes individuals falling within paragraphs (a)(3) and (b)(3) of
Sec. 625.5) in the applicable base period to compute a weekly amount
under paragraph (a) of this section, the individual shall be determined
entitled to a weekly amount equal to 50 percent of the average weekly
payment of regular compensation in the State.
(1) If an individual was customarily or routinely employed or self-
employed less than full-time prior to the individual's unemployment as
a direct result of the major disaster, such individual's weekly amount
under this paragraph (b)(1) shall be determined by calculating the
percent of time the individual was employed or self-employed compared
to the customary and usual hours per week that would constitute the
average per week hours for year-round full-time employment or self-
employment for the occupation, then applying the percentage to the
determined 50 percent of the average weekly amount of regular
compensation paid in the State. The State agency shall utilize
information furnished by the applicant at the time of filing an initial
application for DUA and any labor market or occupational information
available within the State agency to determine the average per week
hours for full-time employment or self-employment for the occupation.
If the weekly amount computed for an individual under this paragraph
(b)(1) is less than the weekly amount computed under paragraph (a) of
this section for the individual, the individual shall be entitled to
the higher weekly amount.
(2) The weekly amount so determined under paragraph (b)(1) of this
section, if not an even dollar amount, shall be rounded in accordance
with the applicable State law.
(c) In the Territory of Guam and the Commonwealth of the Northern
Mariana Islands, the amount of DUA payable to an unemployed worker or
unemployed self-employed individual for a week of total unemployment
shall be the average of the payments of regular compensation made under
all State laws referred to in Sec. 625.2(r)(1)(i) for weeks of total
unemployment in the first four of [[Page 25569]] the last five
completed calendar quarters immediately preceding the quarter in which
the major disaster began. The weekly amount so determined, if not an
even dollar amount, shall be rounded to the next higher dollar.
(d) In American Samoa, Federated States of Micronesia, Republic of
the Marshall Islands and the Trust Territory of the Pacific Islands,
the amount of DUA payable to an unemployed worker or unemployed self-
employed individual for a week of total unemployment shall be the
amount agreed upon by the Regional Administrator, Employment and
Training Administration, for Region IX (San Francisco), and the Federal
Coordinating Officer, which shall approximate 50 percent of the area-
wide average of the weekly wages paid to individuals in the major
disaster area in the quarter immediately preceding the quarter in which
the major disaster began. The weekly amount so determined, if not an
even dollar amount, shall be rounded to the next higher dollar.
(e) The State agency shall immediately determine, upon the filing
of an initial application for DUA, a weekly amount under the provisions
of paragraphs (a) through (d) of this section, as the case may be,
based on the individual's statement of employment or self-employment
preceding the individual's unemployment that was a direct result of the
major disaster, and wages earned or paid for such employment or self-
employment. An immediate determination of a weekly amount shall also be
made where, in conjunction with the filing of an initial application
for DUA, the individual submits documentation substantiating employment
or self-employment and wages earned or paid for such employment or
self-employment, or, in the absence of documentation, where any State
agency records of employment or self-employment and wages earned or
paid for such employment or self-employment, justify the determination
of a weekly amount. An immediate determination shall also be made based
on the individual's statement or in conjunction with the submittal of
documentation in those cases where the individual was to commence
employment or self-employment on or after the date the major disaster
began but was prevented from doing so as a direct result of the
disaster.
(1) In the case of a weekly amount determined in accordance with
paragraph (e) of this section, based only on the individual's statement
of earnings, the individual shall furnish documentation to substantiate
the employment or self-employment or wages earned from or paid for such
employment or self-employment or documentation to support that the
individual was to commence employment or self-employment on or after
the date the major disaster began. In either case, documentation shall
be submitted within 21 calendar days of the filing of the initial
application for DUA.
(2) Any individual who fails to submit documentation to
substantiate employment or self-employment or the planned commencement
of employment or self-employment in accordance with paragraph (e)(1) of
this section, shall be determined ineligible for the payment of DUA for
any week of unemployment due to the disaster. Any weeks for which DUA
was already paid on the application prior to the date of the
determination of ineligibility under this paragraph (e)(2) are overpaid
and a determination shall be issued in accordance with Sec. 625.14(a).
In addition, the State agency shall consider whether the individual is
subject to a disqualification for fraud in accordance with the
provisions set forth in Sec. 625.14(i).
(3) For purposes of a computation of a weekly amount under
paragraph (a) of this section, if an individual submits documentation
to substantiate employment or self-employment in accordance with
paragraph (e)(1), but not documentation of wages earned or paid during
the base period set forth in paragraph (a)(2) of this section,
including those cases where the individual has not filed a tax return
for the most recent tax year that has ended, the State agency shall
immediately redetermine the weekly amount of DUA payable to the
individual in accordance with paragraph (b) of this section.
(4) Any individual determined eligible for a weekly amount of DUA
under the provisions of paragraph (e)(3) of this section may submit
necessary documentation to substantiate wages earned or paid during the
base period set forth in paragraph (a)(2) of this section, including
those cases where the individual has not filed a tax return for the
most recent tax year that has ended, at any time prior to the end of
the disaster assistance period. A redetermination of the weekly amount
payable, as previously determined under paragraph (b) of this section,
shall immediately be made if the wages earned or paid for services
performed in employment or self-employment reflected in such
documentation is sufficient to permit a computation under paragraph (a)
of this section of a weekly amount higher than was determined under
paragraph (b) of this section. Any higher amount so determined shall be
applicable to all weeks during the disaster assistance period for which
the individual was eligible for the payment of DUA.
(f)(1) The weekly amount of DUA payable to an unemployed worker or
unemployed self-employed individual for a week of partial or part-total
unemployment shall be the weekly amount determined under paragraph (a),
(b), (c) or (d) of this section, as the case may be, reduced (but not
below zero) by the amount of wages that the individual earned in that
week as determined by applying to such wages the earnings allowance for
partial or part-total employment prescribed by the applicable State
law.
(2) The weekly amount of DUA payable to an unemployed self-employed
individual for a week of unemployment shall be the weekly amount
determined under paragraph (a), (b), (c) or (d) of this section, as the
case may be, reduced (but not below zero) by the full amount of any
income received during the week for the performance of services in
self-employment, regardless of whether or not any services were
performed during the week, by applying the earnings allowance as set
forth in paragraph (f)(1) of this section. Notwithstanding the
definition of ``wages'' for a self-employed individual under
Sec. 625.2(u), the term ``any income'' for purposes of this paragraph
(f)(2) means gross income.
[FR Doc. 95-11617 Filed 5-10-95; 8:45 am]
BILLING CODE 4510-30-M
