[Federal Register Volume 76, Number 113 (Monday, June 13, 2011)]
[Notices]
[Pages 34270-34271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14478]
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DEPARTMENT OF LABOR
Employment and Training Administration
Federal-State Extended Benefits Program--Methodology for
Calculating ``on'' or ``off'' Total Unemployment Rate Indicators for
Purposes of Determining When a State Begins and Ends an Extended
Benefit Period
AGENCY: Employment and Training Administration, Labor.
ACTION: Notice.
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SUMMARY: UIPL 16-11 informs states of the methodology used to calculate
the ``on'' or ``off'' total unemployment rate (TUR) indicators to
determine when extended benefit (EB) periods begin and end in a state.
UIPL 16-11 is published below to inform the public and is available at:
http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3027.
SUPPLEMENTARY INFORMATION:
UIPL 16-11: Federal-State Extended Benefits Program--Methodology for
Calculating ``on'' or ``off'' Total Unemployment Rate Indicators for
Purposes of Determining When a State Begins and Ends an Extended
Benefit Period
1. Purpose. To inform states of the new methodology used to
calculate the ``on'' or ``off'' total unemployment rate (TUR)
indicators to determine when extended benefit (EB) periods begin and
end in a state.
2. References. The Federal-State Extended Unemployment Compensation
Act of 1970 (EUCA); Section 2005 of Division B, Title II, the
Assistance for
[[Page 34271]]
Unemployed Workers and Struggling Families Act, Public Law (Pub. L.)
111-5; Section 502 of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010, Public Law 111-312; 26
U.S.C. 3304(a)(11) note; 20 CFR 615.12; Unemployment Insurance Program
Letter (UIPL) No. 45-92; UIPL No. 4-10, Change 6.
3. Background. EB is payable in a state only during an EB period in
the state, that is, a period of unusually high unemployment. Section
203, EUCA, provides methods for determining whether a state's current
unemployment situation qualifies as an EB period. EB periods are
determined by ``on'' and ``off'' indicators (commonly referred to as
triggers) in the state. Section 203(d), EUCA, provides for an ``on''
indicator based on the insured unemployment rate (IUR). The IUR is
calculated weekly by the states using administrative data on state
unemployment compensation claims filed and the total population of
employed individuals covered by unemployment insurance. States trigger
``on'' EB if the IUR for the most recent 13-week period equals or
exceeds 5 percent and equals or exceeds 120 percent of the average of
such rates for the corresponding 13-week period ending in each of the
preceding two calendar years. The calculation of the relationship
between the current rate and prior year's rates is commonly referred to
as the ``look-back.''
The Unemployment Compensation Amendments of 1992, Pub. L. 102-318,
added Section 203(f), EUCA, to provide for an optional alternative
indicator that states may use to trigger ``on'' EB based on the TUR.
That indicator requires that, for the most recent three months for
which data for all states is published, the average TUR in the state
(seasonally adjusted) for the most recent three-month period equals or
exceeds 6.5 percent and the average TUR in the state (seasonally
adjusted) equals or exceeds 110 percent of the average TUR for either
or both of the corresponding three-month periods in the two preceding
calendar years (look-back). The 1992 amendments also provided for a
calculation of a ``high unemployment period'' when the TUR in a state
equals or exceeds 8 percent and meets the 110 percent look-back
described above, permitting the payment of additional weeks of EB.
Section 203(f)(3), EUCA, provides that ``determinations of the rate of
total unemployment in any state for any period * * * shall be made by
the Secretary.'' An EB period ends when the state no longer meets any
of the ``on'' triggers provided for in state law.
Regulations at 20 CFR 615 implement the provisions of EUCA relating
to the IUR indicators, including how they will be calculated. The
regulation, at 20 CFR 615.12, explains the IUR triggers and how the
rates are calculated. The regulation does not address the TUR
indicator. The Department is issuing this guidance to describe how the
TUR indicators are calculated for purposes of determining whether a
state meets the 110 percent look-back requirement. The Department plans
to promulgate regulations about this methodology in the near future.
In the absence of explicit guidance and regulation, the Department
previously adapted a portion of the existing guidance for the IUR look-
back indicator as a basis for calculating the TUR look-back indicator
as well. Specifically, in computing the look-back percentage for the
TUR trigger the procedure for determining the number of significant
digits from the resulting fraction followed 20 CFR 615.12(c)(3).
The TUR trigger is calculated using unemployment rates determined
by the Bureau of Labor Statistics. These rates are determined using
sampled data and therefore have error around them. In contrast, IUR
triggers are calculated from administrative data and thus represent the
full universe. Because of these differences in the calculation of the
insured and total unemployment rates, the Department has determined
that an appropriate methodology for calculating the look-back on the
TUR indicator is to switch from truncation at the fourth decimal place
as used for the IUR to rounding at the second decimal place.
The Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 permitted states to amend state law in order to
make determinations of whether there is an ``on'' or ``off'' indicator
by comparing current unemployment rates to the unemployment rates for
the corresponding period in the three preceding years. Authority to use
this three-year look-back applies only for weeks of unemployment
beginning after December 17, 2010, and ending on or before December 31,
2011. The Department will also use the methodology described below in
determining whether a state meets the three-year TUR look-back criteria
for those states that chose to amend their law to take advantage of
this temporary authority.
4. Methodology. The Department will now use the following method of
computing the current rate as a percentage of the comparable rate in
prior years (look-back) for the TUR indicator: On a monthly basis, the
three month average, seasonally adjusted rate of total unemployment is
divided by the same measure for the corresponding three months in each
of the applicable prior years, that is, either a two- or three-year
look-back, as specified in state law. The resultant decimal fraction is
then rounded to the hundredths place (the second digit to the right of
the decimal place). The resulting number is then multiplied by 100 and
reported as an integer and compared to the statutory threshold to
determine the state's trigger status.
5. Effective date of implementation. In order to give full effect
to this methodology, and to ensure that all unemployed individuals who
are eligible to receive EB are paid in a timely manner, the Department
is implementing the methodology described in Section 4 of this guidance
retroactive to April 16, 2011.
6. Action requested. Administrators are to provide this information
to the appropriate staff.
7. Inquiries. Please direct inquiries to the appropriate Regional
Office.
Dated: June 6, 2011.
Jane Oates,
Assistant Secretary, Employment and Training Administration.
[FR Doc. 2011-14478 Filed 6-10-11; 8:45 am]
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