[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2013 Edition]
[From the U.S. Government Printing Office]



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          Title 20

Employees' Benefits


________________________

Parts 500 to 656

                         Revised as of April 1, 2013

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2013
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 20:
          Chapter IV--Employees' Compensation Appeals Board, 
          Department of Labor                                        3
          Chapter V--Employment and Training Administration, 
          Department of Labor                                       11
  Finding Aids:
      Table of CFR Titles and Chapters........................     623
      Alphabetical List of Agencies Appearing in the CFR......     643
      List of CFR Sections Affected...........................     653

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 20 CFR 501.1 refers 
                       to title 20, part 501, 
                       section 1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
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    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
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[[Page vi]]

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    Director,
    Office of the Federal Register.
    April 1, 2013.







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                               THIS TITLE

    Title 20--Employees' Benefits is composed of four volumes. The first 
volume, containing parts 1-399, includes current regulations issued by 
the Office of Workers' Compensation Programs, Department of Labor and 
the Railroad Retirement Board. The second volume, containing parts 400-
499, includes all current regulations issued by the Social Security 
Administration. The third volume, containing parts 500 to 656, includes 
current regulations issued by the Employees' Compensation Appeals Board, 
and the Employment and Training Administration. The fourth volume, 
containing part 657 to End, includes the current regulations issued by 
the Office of Workers' Compensation Programs, the Benefits Review Board, 
the Office of the Assistant Secretary for Veterans' Employment and 
Training Service (all of the Department of Labor) and the Joint Board 
for the Enrollment of Actuaries. The contents of these volumes represent 
all current regulations codified under this title of the CFR as of April 
1, 2013.

    An index to chapter III appears in the second volume.

    For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.

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                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains parts 500 to 656)

  --------------------------------------------------------------------
                                                                    Part

chapter iv--Employees' Compensation Appeals Board, 
  Department of Labor.......................................         501

chapter v--Employment and Training Administration, 
  Department of Labor.......................................         601

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 CHAPTER IV--EMPLOYEES' COMPENSATION APPEALS BOARD, DEPARTMENT OF LABOR




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Part                                                                Page
500

[Reserved]

501             Rules of procedure..........................           5

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                           PART 500 [RESERVED]



PART 501_RULES OF PROCEDURE--Table of Contents



Sec.
501.1 Definitions.
501.2 Scope and applicability of rules; composition and jurisdiction of 
          the Board.
501.3 Notice of appeal.
501.4 Case record; inspection; submission of pleadings and motions.
501.5 Oral argument.
501.6 Decisions and orders.
501.7 Petition for reconsideration.
501.8 Clerk of the Office of the Appellate Boards; docket of 
          proceedings; records.
501.9 Representation; appearances and fees.

    Authority: Federal Employees' Compensation Act (FECA), 5 U.S.C. 8101 
et seq.

    Source: 73 FR 62193, Oct. 20, 2008, unless otherwise noted.



Sec.501.1  Definitions.

    (a) FECA means the Federal Employees' Compensation Act, 5 U.S.C. 
8101 et seq. and any statutory extension or application thereof.
    (b) The Board means the Employees' Compensation Appeals Board.
    (c) Chief Judge and Chairman of the Board means the Chairman of the 
Employees' Compensation Appeals Board.
    (d) Judge or Alternate Judge means a member designated and appointed 
by the Secretary of Labor with authority to hear and make final 
decisions on appeals taken from determinations and awards by the OWCP in 
claims arising under the FECA.
    (e) OWCP means the Office of Workers' Compensation Programs, 
Employment Standards Administration, U.S. Department of Labor.
    (f) Director means the Director of the Office of Workers' 
Compensation Programs or a person delegated authority to perform the 
functions of the Director. The Director of OWCP is represented before 
the Board by an attorney designated by the Solicitor of Labor.
    (g) Appellant means any person adversely affected by a final 
decision or order of the OWCP who files an appeal to the Board.
    (h) Representative means an individual properly authorized by an 
Appellant in writing to act for the Appellant in connection with an 
appeal before the Board. The Representative may be any individual or an 
attorney who has been admitted to practice and who is in good standing 
with any court of competent jurisdiction.
    (i) Decision, as prescribed by 5 U.S.C. 8149 of the FECA, means the 
final determinative action made by the Board on appeal of a claim.
    (j) Clerk or Office of the Clerk means the Clerk of the Office of 
the Appellate Boards.



Sec.501.2  Scope and applicability of rules; composition and
jurisdiction of the Board.

    (a) The regulations in this part establish the Rules of Practice and 
Procedure governing the operation of the Employees' Compensation Appeals 
Board.
    (b) The Board consists of three permanent judges, one of whom is 
designated as Chief Judge and Chairman of the Board, and such alternate 
judges as are appointed by the Secretary of Labor. The Chief Judge is 
the administrative officer of the Board. The functions of the Board are 
quasi-judicial. For organizational purposes, the Board is placed in the 
Office of the Secretary of Labor and sits in Washington, DC.
    (c) The Board has jurisdiction to consider and decide appeals from 
final decisions of OWCP in any case arising under the FECA. The Board 
may review all relevant questions of law, fact and exercises of 
discretion (or failure to exercise discretion) in such cases.
    (1) The Board's review of a case is limited to the evidence in the 
case record that was before OWCP at the time of its final decision. 
Evidence not before OWCP will not be considered by the Board for the 
first time on appeal.
    (2) There will be no appeal with respect to any interlocutory matter 
decided (or not decided) by OWCP during the pendency of a case.
    (3) The Board and OWCP may not exercise simultaneous jurisdiction 
over the same issue in a case on appeal. Following the docketing of an 
appeal before the Board, OWCP does not retain jurisdiction to render a 
further decision regarding the issue on appeal until after the Board 
relinquishes jurisdiction.

[[Page 6]]



Sec.501.3  Notice of Appeal.

    (a) Who may file. Any person adversely affected by a final decision 
of the Director, or his or her authorized Representative, may file for 
review of such decision by the Board.
    (b) Place of filing. The notice of appeal shall be filed with the 
Clerk at 200 Constitution Avenue, NW., Washington, DC 20210.
    (c) Content of notice of appeal. A notice of appeal shall contain 
the following information:
    (1) Date of Appeal.
    (2) Full name, address and telephone number of the Appellant and the 
full name of any deceased employee on whose behalf an appeal is taken. 
In addition, the Appellant must provide a signed authorization 
identifying the full name, address and telephone number of his or her 
Representative, if applicable.
    (3) Employing establishment, and the date, description and place of 
injury.
    (4) Date and Case File Number assigned by OWCP concerning the 
decision being appealed to the Board.
    (5) A statement explaining Appellant's disagreement with OWCP's 
decision and stating the factual and/or legal argument in favor of the 
appeal.
    (6) Signature: An Appellant must sign the notice of appeal.
    (d) Substitution of appellant: Should the Appellant die after having 
filed an appeal with the Board, the appeal may proceed to decision 
provided there is the substitution of a proper Appellant who requests 
that the appeal proceed to decision by the Board.
    (e) Time limitations for filing. Any notice of appeal must be filed 
within 180 days from the date of issuance of a decision of the OWCP. The 
Board maintains discretion to extend the time period for filing an 
appeal if an applicant demonstrates compelling circumstances. Compelling 
circumstances means circumstances beyond the Appellant's control that 
prevent the timely filing of an appeal and does not include any delay 
caused by the failure of an individual to exercise due diligence in 
submitting a notice of appeal.
    (f) Date of filing. A notice of appeal complying with paragraph (c) 
of this section is considered to have been filed only if received by the 
Clerk by the close of business within the period specified under 
paragraph (e) of this section, except as otherwise provided in this 
subsection:
    (1) If the notice of appeal is sent by United States Mail or 
commercial carrier and use of the date of delivery as the date of filing 
would result in a loss of appeal rights, the appeal will be considered 
to have been filed as of the date of postmark or other carriers' date 
markings. The date appearing on the U.S. Postal Service postmark or 
other carriers' date markings (when available and legible) shall be 
prima facie evidence of the date of mailing. If there is no such 
postmark or date marking or it is not legible, other evidence, such as, 
but not limited to, certified mail receipts, certificate of service and 
affidavits, may be used to establish the mailing date. If a notice of 
appeal is delivered or sent by means other than United States Mail or 
commercial carrier, including personal delivery or fax, the notice is 
deemed to be received when received by the Clerk.
    (2) In computing the date of filing, the 180 day time period for 
filing an appeal begins to run on the day following the date of the OWCP 
decision. The last day of the period so computed shall be included, 
unless it is a Saturday, Sunday or Federal holiday, in which event the 
period runs to the close of the next business day.
    (g) Failure to timely file a notice of appeal. The failure of an 
Appellant or Representative to file an appeal with the Board within the 
period specified under paragraph (e) of this section, including any 
extensions granted by the Board in its discretion based upon compelling 
circumstances, will foreclose all right to review. The Board will 
dismiss any untimely appeal for lack of jurisdiction.
    (h) Incomplete notice of appeal. Any timely notice of appeal that 
does not contain the information specified in paragraph (c) of this 
section will be considered incomplete. On receipt by the Board, the 
Clerk will inform Appellant of the deficiencies in the notice of appeal 
and specify a reasonable time to submit the requisite information. Such 
appeal will be dismissed unless Appellant provides the requisite 
information in the time specified by the Clerk.

[[Page 7]]



Sec.501.4  Case record; inspection; submission of pleadings and motions.

    (a) Service on OWCP and transmission of OWCP case record. The Board 
shall serve upon the Director a copy of each notice of appeal and 
accompanying documents. Within 60 days from the date of such service, 
the Director shall provide to the Board the record of the OWCP 
proceeding to which the notice refers. On application of the Director, 
the Board may, in its discretion, extend the time period for submittal 
of the OWCP case record.
    (b) Inspection of record. The case record on appeal is an official 
record of the OWCP.
    (1) Upon written application to the Clerk, an Appellant may request 
inspection of the OWCP case record. At the discretion of the Board, the 
OWCP case record may either be made available in the Office of the Clerk 
of the Appellate Boards for inspection by the Appellant, or the request 
may be forwarded to the Director so that OWCP may make a copy of the 
OWCP case record and forward this copy to the Appellant. Inspection of 
the papers and documents included in the OWCP case record of any appeal 
pending before the Board will be permitted or denied in accordance with 
5 CFR 10.10 to 10.13. The Chief Judge (or his or her designee) shall 
serve as the disclosure officer for purposes of Appendix A to 29 CFR 
Parts 70 and 71.
    (2) Copies of the documents generated in the course of the appeal 
before the Board will be provided to the Appellant and Appellant's 
Representative by the Clerk. If the Appellant needs additional copies of 
such documents while the appeal is pending, the Appellant may obtain 
this information by contacting the Clerk. Pleadings and motions filed 
during the appeal in proceedings before the Board will be made part of 
the official case record of the OWCP.
    (c) Pleadings. The Appellant, the Appellant's Representative and the 
Director may file pleadings supporting their position and presenting 
information, including but not limited to briefs, memoranda of law, 
memoranda of justification, and optional form AB-1. All pleadings filed 
must contain the docket number and be filed with the Clerk. The Clerk 
will issue directions specifying the time allowed for any responses and 
replies.
    (1) The Clerk will distribute copies of any pleading received by the 
Clerk to ensure that the Appellant, his or her Representative and the 
Director receive all pleadings. Any pleading should be submitted within 
60 days of the filing of an appeal. The Board may, in its discretion, 
extend the time period for the submittal of any pleading.
    (2) Proceedings before the Board are informal and there is no 
requirement that any pleading be filed. Failure to submit a pleading or 
to timely submit a pleading does not prejudice the rights of either the 
Appellant or the Director.
    (3) Upon receipt of a pleading, the Appellant and the Director will 
have the opportunity to submit a response to the Board.
    (d) Motions. Motions are requests for the Board to take specific 
action in a pending appeal. Motions include, but are not limited to, 
motions to dismiss, affirm the decision below, remand, request a 
substitution, request an extension of time, or other such matter as may 
be brought before the Board. Motions may be filed by the Appellant, the 
Appellant's Representative and the Director. The motion must be in 
writing, contain the docket number, state the relief requested and the 
basis for the relief requested, and be filed with the Clerk. Any motion 
received will be sent by the Clerk to ensure that the Appellant, his or 
her Representative and the Director receive all motions. The Clerk will 
issue directions specifying the timing of any responses and replies. The 
Board also may act on its own to issue direction in pending appeals, 
stating the basis for its determination.
    (e) Number of copies. All filings with the Board, including any 
notice of appeal, pleading, or motion shall include an original and two 
(2) legible copies.



Sec.501.5  Oral argument.

    (a) Oral argument. Oral argument may be held in the discretion of 
the Board, on its own determination or on application by Appellant or 
the Director.
    (b) Request. A request for oral argument must be submitted in 
writing to

[[Page 8]]

the Clerk. The application must specify the issue(s) to be argued and 
provide a statement supporting the need for oral argument. The request 
must be made no later than 60 days after the filing of an appeal. Any 
appeal in which a request for oral argument is not granted by the Board 
will proceed to a decision based on the case record and any pleadings 
submitted.
    (c) Notice of argument. If a request for oral argument is granted, 
the Clerk will notify the Appellant and the Director at least 30 days 
before the date set for argument. The notice of oral argument will state 
the issues that the Board has determined will be heard.
    (d) Time allowed. Appellant and any Representative for the Director 
shall be allowed no more than 30 minutes to present oral argument. The 
Board may, in its discretion, extend the time allowed.
    (e) Appearances. An Appellant may appear at oral argument before the 
Board or designate a Representative. Argument shall be presented by the 
Appellant or a Representative, not both. The Director may be represented 
by an attorney with the Solicitor of Labor. Argument is limited to the 
evidence of record on appeal.
    (f) Location. Oral argument is heard before the Board only in 
Washington, DC. The Board does not reimburse costs associated with 
attending oral argument.
    (g) Continuance. Once oral argument has been scheduled by the Board, 
a continuance will not be granted except on a showing of good cause. 
Good cause may include extreme hardship or where attendance by an 
Appellant or Representative is mandated at a previously scheduled 
judicial proceeding. Any request for continuance must be received by the 
Board at least 15 days before the date scheduled for oral argument and 
be served by the requester upon Appellant and the Director. No request 
for a second continuance will be entertained by the Board. In such case, 
the appeal will proceed to a decision based on the case record. The 
Board may reschedule or cancel oral argument on its own motion at any 
time.
    (h) Nonappearance. The absence of an Appellant, his or her 
Representative, or the Director at the time and place set for oral 
argument will not delay the Board's resolution of an appeal. In such 
event, the Board may, in its discretion, reschedule oral argument, or 
cancel oral argument and treat the case as submitted on the case record.



Sec.501.6  Decisions and orders.

    (a) Decisions. A decision of the Board will contain a written 
opinion setting forth the reasons for the action taken and an 
appropriate order. The decision is based on the case record, all 
pleadings and any oral argument. The decision may consist of an 
affirmance, reversal or remand for further development of the evidence, 
or other appropriate action.
    (b) Panels. A decision of not less than two judges will be the 
decision of the Board.
    (c) Issuance. The date of the Board's decision is the date of 
issuance or such date as determined by the Board. Issuance is not 
determined by the postmark on any letter containing the decision or the 
date of actual receipt by Appellant or the Director.
    (d) Finality. The decisions and orders of the Board are final as to 
the subject matter appealed, and such decisions and orders are not 
subject to review, except by the Board. The decisions and orders of the 
Board will be final upon the expiration of 30 days from the date of 
issuance unless the Board has fixed a different period of time therein. 
Following the expiration of that time, the Board no longer retains 
jurisdiction over the appeal unless a timely petition for 
reconsideration is submitted and granted.
    (e) Dispositive orders. The Board may dispose of an appeal on a 
procedural basis by issuing an appropriate order disposing of part or 
all of a case prior to reaching the merits of the appeal. The Board may 
proceed to an order on its own or on the written motion of Appellant or 
the Director.
    (f) Service. The Board will send its decisions and orders to the 
Appellant, his or her Representative and the Director at the time of 
issuance.



Sec.501.7  Petition for reconsideration.

    (a) Time for filing. The Appellant or the Director may file a 
petition for reconsideration of a decision or order

[[Page 9]]

issued by the Board within 30 days of the date of issuance, unless 
another time period is specified in the Board's order.
    (b) Where to File. The petition must be filed with the Clerk. Copies 
will be sent by the Clerk to the Director, the Appellant and his or her 
Representative in the time period specified by the Board.
    (c) Content of petition. The petition must be in writing. The 
petition must contain the docket number, specify the matters claimed to 
have been erroneously decided, provide a statement of the facts upon 
which the petitioner relies, and a discussion of applicable law. New 
evidence will not be considered by the Board in a petition for 
reconsideration.
    (d) Panel. The panel of judges who heard and decided the appeal will 
rule on the petition for reconsideration. If any member of the original 
panel is unavailable, the Chief Judge may designate a new panel member. 
The decision or order of the Board will stand as final unless vacated or 
modified by the vote of at least two members of the reconsideration 
panel.
    (e) Answer. Upon the filing of a petition for reconsideration, 
Appellant or the Director may file an answer to the petition within such 
time as fixed by the Board.
    (f) Oral argument and decision on reconsideration. An oral argument 
may be allowed at the discretion of the Board upon application of the 
Appellant or Director or the Board may proceed to address the matter 
upon the papers filed. The Board shall grant or deny the petition for 
reconsideration and issue such orders as it deems appropriate.



Sec.501.8  Clerk of the Office of the Appellate Boards; docket of
proceedings; records.

    (a) Location and business hours. The Office of the Clerk of the 
Appellate Boards is located at 200 Constitution Avenue, NW., Washington, 
DC 20210. The Office of the Clerk is open during business hours on all 
days except Saturdays, Sundays and Federal holidays, from 8:30 a.m. to 5 
p.m.
    (b) Docket. The Clerk will maintain a docket containing a record of 
all proceedings before the Board. Each docketed appeal will be assigned 
a number in chronological order based upon the date on which the notice 
of appeal is received. While the Board generally hears appeals in the 
order docketed, the Board retains discretion to change the order in 
which a particular appeal will be considered. The Clerk will prepare a 
calendar of cases submitted or awaiting oral argument and such other 
records as may be required by the Board.
    (c) Publication of decisions. Final decisions of the Board will be 
published in such form as to be readily available for inspection by the 
general public.



Sec.501.9  Representation; appearances and fees.

    (a) Representation. In any proceeding before the Board, an Appellant 
may appear in person or by appointing a duly authorized individual as 
his or her Representative.
    (1) Counsel. The designated Representative may be an attorney who 
has been admitted to practice and who is in good standing with any court 
of competent jurisdiction.
    (2) Lay representative. A non-attorney Representative may represent 
an Appellant before the Board. He or she may be an accredited 
Representative of an employee organization.
    (3) Former members of the Board and other employees of the 
Department of Labor. A former judge of the Board is not allowed to 
participate as counsel or other Representative before the Board in any 
proceeding until two years from the termination of his or her status as 
a judge of the Board. The practice of a former judge or other former 
employee of the Department of Labor is governed by 29 CFR Part 0, 
Subpart B.
    (b) Appearance. No individual may appear as a Representative in a 
proceeding before the Board without first filing with the Clerk a 
written authorization signed by the Appellant to be represented. When 
accepted by the Board, such Representative will continue to be 
recognized unless the Representative withdraws or abandons such capacity 
or the Appellant directs otherwise.
    (c) Change of address. Each Appellant and Representative authorized 
to appear before the Board must give the

[[Page 10]]

Clerk written notice of any change to the address or telephone number of 
the Appellant or Representative. Such notice must identify the docket 
number and name of each pending appeal for that Appellant, or, in the 
case of a Representative, in which he or she is a Representative before 
the Board. Absent such notice, the mailing of documents to the address 
most recently provided to the Board will be fully effective.
    (d) Debarment of Counsel or Representative. In any proceeding, 
whenever the Board finds that a person acting as counsel or other 
Representative for the Appellant or the Director, is guilty of unethical 
or unprofessional conduct, the Board may order that such person be 
excluded from further acting as counsel or Representative in such 
proceeding. Such order may be appealed to the Secretary of Labor or his 
or her designee, but proceedings before the Board will not be delayed or 
suspended pending disposition of such appeal. However, the Board may 
suspend the proceeding of an appeal for a reasonable time for the 
purpose of enabling Appellant or the Director to obtain different 
counsel or other Representative. Whenever the Board has issued an order 
precluding a person from further acting as counsel or Representative in 
a proceeding, the Board will, within a reasonable time, submit to the 
Secretary of Labor or his or her designee a report of the facts and 
circumstances surrounding the issuance of such order. The Board will 
recommend what action the Secretary of Labor should take in regard to 
the appearance of such person as counsel or Representative in other 
proceedings before the Board. Before any action is taken debarring a 
person as counsel or Representative from other proceedings, he or she 
will be furnished notice and the opportunity to be heard on the matter.
    (e) Fees for attorney, Representative, or other services. No claim 
for a fee for legal or other service performed on appeal before the 
Board is valid unless approved by the Board. Under 18 U.S.C. 292, 
collecting a fee without the approval of the Board may constitute a 
misdemeanor, subject to fine or imprisonment for up to a year or both. 
No contract for a stipulated fee or on a contingent fee basis will be 
approved by the Board. No fee for service will be approved except upon 
written application to the Clerk, supported by a statement of the extent 
and nature of the necessary work performed before the Board on behalf of 
the Appellant. The fee application will be served by the Clerk on the 
Appellant and a time set in which a response may be filed. Except where 
such fee is de minimis, the fee request will be evaluated with 
consideration of the following factors:
    (1) Usefulness of the Representative's services;
    (2) The nature and complexity of the appeal;
    (3) The capacity in which the Representative has appeared;
    (4) The actual time spent in connection with the Board appeal; and
    (5) Customary local charges for similar services.

[[Page 11]]



 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
601             Administrative procedure....................          13
602             Quality control in the Federal-State 
                    unemployment insurance system...........          16
603             Federal-State Unemployment Compensation (UC) 
                    Program; confidentiality and disclosure 
                    of State UC information.................          24
604             Regulations for eligibility for unemployment 
                    compensation............................          35
606             Tax credits under the Federal Unemployment 
                    Tax Act; advances under Title XII of the 
                    Social Security Act.....................          38
609             Unemployment compensation for Federal 
                    civilian employees......................          47
614             Unemployment compensation for ex-
                    servicemembers..........................          59
615             Extended benefits in the Federal-State 
                    Unemployment Compensation Program.......          80
616             Interstate arrangement for combining 
                    employment and wages....................          98
617             Trade adjustment assistance for workers 
                    under the Trade Act of 1974.............         102
618             Trade adjustment assistance under the Trade 
                    Act of 1974, as amended.................         152
619-621

[Reserved]

625             Disaster unemployment assistance............         155
626-634

[Reserved]

636-638

[Reserved]

639             Worker adjustment and retraining 
                    notification............................         180
640             Standard for benefit payment promptness--
                    unemployment compensation...............         190
641             Provisions governing the Senior Community 
                    Service Employment Program..............         193
645             Provisions governing welfare-to-work grants.         235
646

[Reserved]

[[Page 12]]

650             Standard for appeals promptness--
                    unemployment compensation...............         257
651             General provisions governing the Federal-
                    State Employment Service System.........         259
652             Establishment and functioning of State 
                    employment services.....................         263
653             Services of the Employment Service System...         271
654             Special responsibilities of the Employment 
                    Service System..........................         289
655             Temporary employment of foreign workers in 
                    the United States.......................         298
656             Labor certification process for permanent 
                    employment of aliens in the United 
                    States..................................         590

[[Page 13]]



PART 601_ADMINISTRATIVE PROCEDURE--Table of Contents



  Subpart A_Approval, Certification and Findings With Respect to State 
  Laws and Plans of Operation for Normal and Additional Tax Credit and 
                             Grant Purposes

Sec.
601.1 General.
601.2 Approval of State unemployment compensation laws.
601.3 Findings with respect to State laws and plans of operation.
601.4 Certification for tax credit.
601.5 Withholding payments and certifications.

                  Subpart B_Grants, Advances and Audits

601.6 Grants for administration of unemployment compensation laws and 
          employment service.
601.7 [Reserved]
601.8 Agreement with Postmaster General.
601.9 Audits.

    Authority: 5 U.S.C. 301; 26 U.S.C. Chapter 23; 29 U.S.C. 49k; 38 
U.S.C. Chapters 41 and 42; 39 U.S.C. 3202(a)(1)(E) and 3202 note; 42 
U.S.C. 1302; and Secretary of Labor's Order No. 4-75, 40 FR 18515.

    Source: 15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, unless 
otherwise noted.

    Editorial Note: Nomenclature changes to part 601 appear at 71 FR 
35512, June 21, 2006.



  Subpart A_Approval, Certification and Findings With Respect to State 
  Laws and Plans of Operation for Normal and Additional Tax Credit and 
                             Grant Purposes



Sec.601.1  General.

    (a) State unemployment compensation laws are approved and certified 
as provided in section 3304 of the Internal Revenue Code of 1986; 
findings are made regarding reduced rates permitted by a State law 
(section 3303(a) of the Internal Revenue Code of 1986) and such laws are 
certified as provided in section 3303(b) of the Internal Revenue Code of 
1986; findings are made regarding the inclusion of specified provisions 
(section 303(a) of the Social Security Act) in State laws approved under 
section 3304(a) of the Internal Revenue Code of 1986; findings are made 
whether the States have accepted the provisions of the Wagner-Peyser Act 
and whether their plans of operation for public employment offices 
comply with the provisions of said Act.
    (b) Normal and additional tax credit is given to taxpayers against 
taxes imposed by section 3301 of the Internal Revenue Code of 1986.
    (c) Grants of funds are made to States for administration of their 
employment security laws if their unemployment compensation laws and 
their plans of operation for public employment offices meet required 
conditions of Federal law. (Section 303(a) of the Social Security Act; 
section 3304(a) of the Internal Revenue Code of 1986; sections 6, 7, and 
8 of the Wagner-Peyser Act.)
    (d) As used throughout this Part, the terms ``Secretary'' or 
``Secretary of Labor'' shall refer to the Secretary of Labor, U.S. 
Department of Labor, or his or her designee.

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 61 
FR 19983, May 3, 1996]



Sec.601.2  Approval of State unemployment compensation laws.

    States may at their option submit their unemployment compensation 
laws for approval (section 3304(a) of the Internal Revenue Code of 
1986).
    (a) Submission. The States submit to the Employment and Training 
Administration (ETA), one copy of the State unemployment compensation 
law properly certified by an authorized State official to be true and 
complete, together with a written request for approval.
    (b) [Reserved]
    (c) Approval. The Secretary of Labor determines whether the State 
law contains the provisions required by section 3304(a) of the Internal 
Revenue Code of 1986. If the State law is approved, the Secretary 
notifies the Governor of the State within 30 days of the submission of 
such law.
    (d) Certification. On October 31 of each taxable year the Secretary 
of Labor certifies, for the purposes of normal tax credit (section 
3302(a)(1) of the Internal Revenue Code of 1986), to the Secretary of 
the Treasury each State

[[Page 14]]

the law of which the Secretary has previously approved. (See also Sec.
601.5.)

(Approved by the Office of Management and Budget under control number 
1205-0222)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984; 50 FR 51241, Dec. 16, 1985; 71 FR 35513, June 
21, 2006]



Sec.601.3  Findings with respect to State laws and plans of operation.

    For purposes of grants, findings are made regarding the inclusion in 
State unemployment compensation laws, approved under section 3304(a) of 
the Internal Revenue Code of 1986, of provisions required by section 
303(a) of the Social Security Act (see Sec.601.2); findings are also 
made whether a State has accepted the provisions of the Wagner-Peyser 
Act and whether its plan of operation for public employment offices 
complies with the provisions of said act. For purposes of additional tax 
credit, findings are made regarding reduced rates of contributions 
permitted by the State law (section 3303(a) (1) of the Internal Revenue 
Code of 1986).

So that the Secretary of Labor may be enabled to determine the status of 
State laws and plans of operation, all relevant State materials, such as 
statutes, executive and administrative orders, legal opinions, rules, 
regulations, interpretations, court decisions, etc., are required to be 
submitted currently.
    (a) Submission. The States submit currently to the ETA one copy of 
relevant State material, properly certified by an authorized State 
official to be true and complete.
    (b) [Reserved]
    (c) Findings. The Secretary makes findings as provided in the cited 
sections of the Federal law. In the event that the Secretary is unable 
to make the findings required for certification for payment or for 
certification of the law for purposes of additional tax credit, further 
discussions with State officials are undertaken.

(Approved by the Office of Management and Budget under control number 
1205-0222)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984; 50 FR 51241, Dec. 16, 1985; 71 FR 35513, June 
21, 2006]



Sec.601.4  Certification for tax credit.

    (a) Within 30 days after submittal of a State unemployment 
compensation law for such purpose, the Secretary certifies to the State 
agency, in accordance with the provisions of section 3303(b)(3) of the 
Internal Revenue Code of 1986, the Secretary's findings regarding 
reduced rates of contributions allowable under such law. On October 31 
of each taxable year the Secretary certifies to the Secretary of the 
Treasury the law of each State, certified with respect to such year 
under section 3304 of the Internal Revenue Code of 1986 (see Sec.
601.2), which the Secretary finds allows reduced rates with respect to 
such taxable year only in accordance with the provisions of section 
3303(a) of the Internal Revenue Code of 1986.
    (b) With regard to certification for payment, see Sec.601.6.

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 71 
FR 35513, June 21, 2006]



Sec.601.5  Withholding payments and certifications.

    (a) When withheld. Payment of funds to States or yearend 
certification of State laws, or both, are withheld when the Secretary 
finds, after reasonable notice and opportunity for hearing:
    (1) That any provision required by section 303(a) of the Social 
Security Act is no longer included in the State unemployment 
compensation law; or
    (2) That the State unemployment compensation law has been so changed 
as no longer to meet the conditions required by section 3303(a) of the 
Internal Revenue Code of 1986 (section 3303(b)(3) of the Internal 
Revenue Code); or
    (3) That the State unemployment compensation law has been so amended 
as no longer to contain the provisions specified in section 3304(a) or 
has failed to comply substantially with any such provision and such 
finding has become effective (section 3304(c) of the Internal Revenue 
Code of 1986); or
    (4) That in the administration of the State unemployment 
compensation law there has been a failure to comply substantially with 
required provisions of such law (section 303(b)(2) of the Social 
Security Act and section 3303(b)(3) of the Internal Revenue Code of 
1986); or

[[Page 15]]

    (5) That in the administration of the State unemployment 
compensation law there has been a denial, in a substantial number of 
cases, of benefits due under such law, except that there may be no such 
finding until the question of entitlement has been decided by the 
highest judicial authority given jurisdiction under such State law 
(section 303(b)(1) of the Social Security Act); or
    (6) That a State fails to make its unemployment compensation records 
available to the Railroad Retirement Board or fails to cooperate with 
Federal agencies charged with the administration of unemployment 
compensation laws (section 303(c) of the Social Security Act); or
    (7) That a State no longer has a plan of operation for public 
employment offices complying with the provisions of the Wagner-Peyser 
Act; or
    (8) That a State agency has not properly expended, in accordance 
with an approved plan of operation, the Federal monies paid it for 
administration of its public employment service.
    (b) Informal discussion. Such hearings are generally not called, 
however, until after every reasonable effort has been made by ETA 
representatives to resolve the question involved by conference and 
discussion with State officials. Formal notification of the date and 
place of a hearing does not foreclose further negotiations with State 
officials.
    (c) Notice of noncertification. If, at any time during the taxable 
year, the Secretary of Labor has reason to believe that a State whose 
unemployment compensation law he/she has previously approved may not be 
certified, the Secretary promptly notifies the Governor of the State to 
that effect (section 3304(d) of the Internal Revenue Code of 1986).
    (d) Notice of hearing. Notice of hearing is sent by the Secretary of 
Labor to the State unemployment compensation agency. The notice sets 
forth the purpose of the hearing, the time, date, and place at which the 
hearing will be held, and the rules of procedure which will be followed. 
At a hearing the State is given an opportunity to present arguments and 
all relevant evidence, written or oral. The Secretary makes the 
necessary determination or findings, on the basis of the record of such 
hearings. A notice of the Secretary's determination or finding is sent 
to the State unemployment compensation agency.
    (e) Civil Rights Act issues. To the extent that any proposed 
withholding of funds involves circumstances within the scope of title VI 
of the Civil Rights Act of 1964 and the regulations promulgated 
thereunder, the procedure set forth in 29 CFR part 31 shall be 
applicable.

[30 FR 6942, May 22, 1965, as amended at 43 FR 13828, Mar. 31, 1978; 71 
FR 35513, June 21, 2006]



                  Subpart B_Grants, Advances and Audits



Sec.601.6  Grants for administration of unemployment compensation
laws and employment service.

    Grants of funds for administration of State unemployment 
compensation laws and public employment service programs are made to 
States under section 302(a) of the Social Security Act, the Wagner-
Peyser Act, and the Appropriation Acts.
    (a) Requests for funds. The forms and instructions used by State 
agencies in requesting funds are available on the ETA Web site (http://
www.ows.doleta.gov/rjm). The forms and instructions call for detailed 
information for each budgetary period concerning the specific amounts 
requested for personal services and other current expenses of State 
agencies, supported by workload and unit-cost estimates. Supplementary 
budget requests are processed in the same manner as regular requests. 
The Administration's representatives in the regional offices furnish 
assistance to the State agencies in preparing requests for funds.
    (b) Processing of requests. (1) State agencies send their requests 
for funds to the Regional Administrator who reviews the requests and 
forwards them to the ETA National Office with his/her recommendation as 
to the amounts necessary for proper and efficient administration of the 
State unemployment compensation law and employment service program.
    (2) The ETA National Office appraises the requests and the 
recommendations

[[Page 16]]

of the regional representatives from a nationwide point of view, 
examining each State's request in the light of the experience of other 
States to insure equitable treatment among the States in the allocation 
of funds made available by Congress for the administration of State 
unemployment compensation laws and public employment service programs.
    (c) Action by ETA National Office. If the ETA National Office 
approves the State's budget request, the State agency is notified; and, 
provided the conditions precedent to grants continue during the 
budgetary period, certifications for payment, under the approved budget, 
stating the amounts, are made by the ETA National Office to the 
Secretary of the Treasury quarterly. Upon denial of a request, in whole 
or in part, the State agency is notified and the Regional Administrator 
is instructed to negotiate with the State with a view to removing the 
basis for denial.

(Approved by the Office of Management and Budget under control number 
1205-0132)

[15 FR 5886, Aug. 31, 1950, as amended at 42 FR 4724, Jan. 25, 1977; 49 
FR 18295, Apr. 30, 1984; 71 FR 35513, June 21, 2006]



Sec.601.7  [Reserved]



Sec.601.8  Agreement with Postmaster General.

    The Secretary of Labor and the Postmaster General have been directed 
by the Congress (title II of the Labor-Federal Security Agency 
Appropriation Act, 1950) to prescribe a mutually satisfactory procedure 
whereby official State employment security postal matter will be handled 
without the prepayment of postage. In lieu of such prepayments, the 
Secretary periodically certifies to the Secretary of the Treasury for 
payment to the U.S. Postal Service the amount necessary to cover the 
cost of State agency mailings. The amount of payment is based on a 
formula agreed upon by the Secretary of Labor and the U.S. Postal 
Service.

[15 FR 5886, Aug. 31, 1950, as amended at 42 FR 4724, Jan. 25, 1977]



Sec.601.9  Audits.

    The Department of Labor's audit regulations at 29 CFR Part 96 and 29 
CFR Part 99 shall apply with respect to employment service and 
unemployment compensation programs.

[46 FR 7766, Jan. 23, 1981, as amended at 71 FR 35513, June 21, 2006]



PART 602_QUALITY CONTROL IN THE FEDERAL-STATE UNEMPLOYMENT INSURANCE 
SYSTEM--Table of Contents



                      Subpart A_General Provisions

Sec.
602.1 Purpose.
602.2 Scope.

                     Subpart B_Federal Requirements

602.10 Federal law requirements.
602.11 Secretary's interpretation.

                    Subpart C_State Responsibilities

602.20 Organization.
602.21 Standard methods and procedures.
602.22 Exceptions.

                   Subpart D_Federal Responsibilities

602.30 Management.
602.31 Oversight.

               Subpart E_Quality Control Grants to States

602.40 Funding.
602.41 Proper expenditure of Quality Control granted funds.
602.42 Effect of failure to implement Quality Control program.
602.43 No incentives or sanctions based on specific error rates.

Appendix A to Part 602--Standard For Claim Determinations--Separation 
          Information

    Authority: 42 U.S.C. 1302.

    Source: 52 FR 33528, Sept. 3, 1987, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 602 appear at 71 FR 
35513, June 21, 2006.



                      Subpart A_General Provisions



Sec.602.1  Purpose.

    The purpose of this part is to prescribe a Quality Control (QC) 
program for the Federal-State unemployment compensation (UC) system, 
which is applicable to the State UC programs and the Federal 
unemployment benefit and allowance programs administered by the State 
unemployment compensation agencies under agreements between the States 
and the Secretary of

[[Page 17]]

Labor (Secretary). QC will be a major tool to assess the timeliness and 
accuracy of State administration of the UC program. It is designed to 
identify errors in claims processes and revenue collections (including 
payments in lieu of contributions and Extended Unemployment Compensation 
Account collections), analyze causes, and support the initiation of 
corrective action.

[52 FR 33528, Sept. 3, 1987, as amended at 71 FR 35513, June 21, 2006]



Sec.602.2  Scope.

    This part applies to all State laws approved by the Secretary under 
the Federal Unemployment Tax Act (section 3304 of the Internal Revenue 
Code of 1986, 26 U.S.C. section 3304), to the administration of the 
State laws, and to any Federal unemployment benefit and allowance 
program administered by the State unemployment compensation agencies 
under agreements between the States and the Secretary. QC is a 
requirement for all States, initially being applicable to the largest 
permanently authorized programs (regular UC including Combined-Wage-
Claims) and federally-funded programs (Unemployment Compensation for Ex-
Servicemembers and Unemployment Compensation for Federal Employees). 
Other elements of the QC program (e.g., interstate, extended benefit 
programs, benefit denials, and revenue collections) will be phased in 
under a schedule determined by the Department in consultation with State 
agencies.

[52 FR 33528, Sept. 3, 1987, as amended at 71 FR 35513, June 21, 2006]



                     Subpart B_Federal Requirements



Sec.602.10  Federal law requirements.

    (a) Section 303(a)(1) of the Social Security Act (SSA), 42 U.S.C. 
503(a)(1), requires that a State law include provision for:

    Such methods of administration . . . as are found by the Secretary 
of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.

    (b) Section 303(a)(6), SSA, 42 U.S.C. 505(a)(6), requires that a 
State law include provision for:

    The making of such reports, in such form and containing such 
information, as the Secretary of Labor may from time to time require, 
and compliance with such provisions as the Secretary of Labor may from 
time to time find necessary to assure the correctness and verification 
of such reports.

    (c) Section 303(b), SSA, 42 U.S.C. 503(b), provides in part that:

    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 in the administration of the 
law there is--

                                * * * * *

    (2) a failure to comply substantially with any provision specified 
in subsection (a);

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 denial or failure to comply. 
Until he is so satisfied, he shall make no further certification to the 
Secretary of the Treasury with respect to such State . . . .

    (d) Certification of payment of granted funds to a State is withheld 
only when the Secretary finds, after reasonable notice and opportunity 
for hearing to the State agency--
    (1) That any provision required by section 303(a) of the Social 
Security Act is no longer included in the State UC law, or
    (2) That in the administration of the State UC law there has been a 
failure to comply substantially with any required provision of such law.

[52 FR 33528, Sept. 3, 1987, as amended at 71 FR 35513, June 21, 2006]



Sec.602.11  Secretary's interpretation.

    (a) The Secretary interprets section 303(a)(1), SSA, to require that 
a State law provide for such methods of administration as will 
reasonably ensure the prompt and full payment of unemployment benefits 
to eligible claimants, and collection and handling of income for the 
State unemployment fund (particularly taxes and reimbursements), with 
the greatest accuracy feasible.
    (b) The Secretary interprets sections 303(a)(1) and 303(a)(6), SSA, 
to authorize the Department of Labor to prescribe standard definitions, 
methods

[[Page 18]]

and procedures, and reporting requirements for the QC program and to 
ensure accuracy and verification of QC findings.
    (c) The Secretary interprets section 303(b)(2), SSA to require that, 
in the administration of a State law, there shall be substantial 
compliance with the provisions required by sections 303(a) (1) and (6). 
Further, conformity of the State law with those requirements is required 
by section 303(a) and Sec.601.5(a) of this chapter.
    (d) To satisfy the requirements of sections 303(a) (1) and (6), a 
State law must contain a provision requiring, or which is construed to 
require, the establishment and maintenance of a QC program in accordance 
with the requirements of this part. The establishment and maintenance of 
such a QC program in accordance with this part shall not require any 
change in State law concerning authority to undertake redeterminations 
of claims or liabilities or the finality of any determination, 
redetermination or decision.



                    Subpart C_State Responsibilities



Sec.602.20  Organization.

    Each State shall establish a QC unit independent of, and not 
accountable to, any unit performing functions subject to evaluation by 
the QC unit. The organizational location of this unit shall be 
positioned to maximize its objectivity, to facilitate its access to 
information necessary to carry out its responsibilities, and to minimize 
organizational conflict of interest.



Sec.602.21  Standard methods and procedures.

    Each State shall:
    (a) Perform the requirements of this section in accordance with 
instructions issued by the Department, pursuant to Sec.602.30(a) of 
this part, to ensure standardization of methods and procedures in a 
manner consistent with this part;
    (b) Select representative samples for QC study of at least a minimum 
size specified by the Department to ensure statistical validity (for 
benefit payments, a minimum of 400 cases of weeks paid per State per 
year);
    (c) Complete prompt and in-depth case investigations to determine 
the degree of accuracy and timeliness in the administration of the State 
UC law and Federal programs with respect to benefit determinations, 
benefit payments, and revenue collections; and conduct other 
measurements and studies necessary or appropriate for carrying out the 
purposes of this part; and in conducting investigations each State 
shall:
    (1) Inform claimants in writing that the information obtained from a 
QC investigation may affect their eligibility for benefits and inform 
employers in writing that the information obtained from a QC 
investigation of revenue may affect their tax liability,
    (2) Use a questionnaire, prescribed by the Department, which is 
designed to obtain such data as the Department deems necessary for the 
operation of the QC program; require completion of the questionnaire by 
claimants in accordance with the eligibility and reporting authority 
under State law,
    (3) Collect data identified by the Department as necessary for the 
operation of the QC program; however, the collection of demographic data 
will be limited to those data which relate to an individual's 
eligibility for UC benefits and necessary to conduct proportions tests 
to validate the selection of representative samples (the demographic 
data elements necessary to conduct proportions tests are claimants' date 
of birth, sex, and ethnic classification); and
    (4) Conclude all findings of inaccuracy as detected through QC 
investigations with appropriate official actions, in accordance with the 
applicable State and Federal laws; make any determinations with respect 
to individual benefit claims in accordance with the Secretary's 
``Standard for Claim Determinations--Separation Information'' in the 
Employment Security Manual, part V, sections 6010-6015 (appendix A of 
this part);
    (d) Classify benefit case findings resulting from QC investigations 
as:
    (1) Proper payments, underpayments, or overpayments in benefit 
payment cases, or
    (2) Proper denials or underpayments in benefit denial cases;
    (e) Make and maintain records pertaining to the QC program, and make

[[Page 19]]

all such records available in a timely manner for inspection, 
examination, and audit by such Federal officials as the Secretary may 
designate or as may be required or authorized by law;
    (f) Furnish information and reports to the Department, including 
weekly transmissions of case data entered into the automated QC system 
and annual reports, without, in any manner, identifying individuals to 
whom such data pertain; and
    (g) Release the results of the QC program at the same time each 
year, providing calendar year results using a standardized format to 
present the data as prescribed by the Department; States will have the 
opportunity to release this information prior to any release by the 
Department.

(Approved by the Office of Management and Budget under Control Number 
1205-0245)



Sec.602.22  Exceptions.

    If the Department determines that the QC program, or any constituent 
part of the QC program, is not necessary for the proper and efficient 
administration of a State law or in the Department's view is not cost 
effective, the Department shall use established procedures to advise the 
State that it is partially or totally excepted from the specified 
requirements of this part. Any determination under this section shall be 
made only after consultations with the State agency.



                   Subpart D_Federal Responsibilities



Sec.602.30  Management.

    (a) The Department shall establish required methods and procedures 
(as specified in Sec.602.21 of this part); and provide technical 
assistance as needed on the QC process.
    (b) The Department shall consider and explore alternatives to the 
prescribed sampling, study, recordkeeping, and reporting methodologies. 
This shall include, but not be limited to, testing the obtaining of 
information needed for QC by telephone and mail rather than in face-to-
face interviews.
    (c) The Department shall maintain a computerized data base of QC 
case data which is transmitted to the Department under Sec.602.21, 
which will be combined with other data for statistical and other 
analysis such as assessing the impact of economic cycles, funding 
levels, and workload levels on program accuracy and timeliness.



Sec.602.31  Oversight.

    The Department shall review QC operational procedures and samples, 
and validate QC methodology to ensure uniformity in the administration 
of the QC program and to ensure compliance with the requirements of this 
part. The Department shall, for purposes of determining eligibility for 
grants described in Sec.602.40, annually review the adequacy of the 
administration of a State's QC program.



               Subpart E_Quality Control Grants to States



Sec.602.40  Funding.

    (a) The Department shall use established procedures to notify States 
of the availability of funds for the operation of QC programs in 
accordance with this part.
    (b) The Department may allocate additional resources, if available, 
to States for analysis of data generated by the QC program, to increase 
the number of claims sampled in areas where more information is needed, 
for pilot studies for the purpose of expanding the QC program, and for 
corrective action.

[52 FR 33528, Sept. 3, 1987, as amended at 71 FR 35513, June 21, 2006]



Sec.602.41  Proper expenditure of Quality Control granted funds.

    The Secretary may, after reasonable notice and opportunity for 
hearing to the State agency, take exception to and require repayment of 
an expenditure for the operation of a QC program if it is found by the 
Secretary that such expenditure is not necessary for the proper and 
efficient administration of the QC program in the State. See sections 
303(a)(8), 303(a)(9) and 303(b)(2), SSA, and 20 CFR 601.5. For purposes 
of this section, an expenditure will be

[[Page 20]]

found not necessary for proper and efficient administration if such 
expenditure fails to comply with the requirements of subpart C of this 
part.

[52 FR 33528, Sept. 3, 1987, as amended at 52 FR 34343, Sept. 10, 1987]



Sec.602.42  Effect of failure to implement Quality Control program.

    Any State which the Secretary finds, after reasonable notice and 
opportunity for hearing, has not implemented or maintained a QC program 
in accordance with this part will not be eligible for any grants under 
title III of the Social Security Act until such time as the Secretary is 
satisfied that there is no longer any failure to conform or to comply 
substantially with any provision specified in this part. See sections 
303(a)(1), 303(a)(6), and 303(b)(2), SSA, and 20 CFR 601.5.



Sec.602.43  No incentives or sanctions based on specific error rates.

    Neither sanctions nor funding incentives shall be used by the 
Department to influence the achievement of specified error rates in 
State UC programs.



    Sec. Appendix A to Part 602--Standard for Claim Determinations--
                         Separation Information

         Employment Security Manual (Part V, Sections 6010-6015)

    6010 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. . . .''
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012 Criteria for Review of State Law Conformity with Federal 
Requirements:
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013 Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria:
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources

[[Page 21]]

and to afford the claimant an opportunity to furnish any further facts 
he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices.
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation of his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------

    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it (1) results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
there is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written

[[Page 22]]

notice of any other determination must contain the information specified 
in as many of the following items as are necessary to enable the 
claimant to understand the determination and to inform him of his appeal 
rights. Information specifically applicable to the individual claimant 
must be contained in the written notice of determination. Information of 
general application such as (but not limited to) the explanation of 
benefits for partial unemployment, information as to deductions, 
seasonality factors, and information as to the manner and place of 
taking an appeal, extension of the appeal period, and where to obtain 
information and assistance may be contained in a booklet or leaflet 
which is given the claimant with his monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits.
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions.
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.

[[Page 23]]

    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanation of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the -------- (name 
of pamphlet or booklet) heretofore furnished to you.''
    6014 Separation Information Requirements Designed To Meet Department 
of Labor Criteria:
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.

[[Page 24]]

    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the workers will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker.
    1. Information required to be given. Employers are required to give 
their employees information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015 Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of the 
alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in section 6012, he 
will so notify the State agency. If the Administrator of the Bureau does 
not so conclude, he will submit the matter to the Secretary. If the 
Secretary concludes that the alternative provisions satisfy the criteria 
in section 6012, the State agency will be so notified. If the Secretary 
concludes that there is a question as to whether the alternative 
provisions satisfy the criteria, the State agency will be advised that 
unless the State law provisions are appropriately revised, a notice of 
hearing will be issued as required by the Code of Federal Regulations, 
title 20, section 601.5.



PART 603_FEDERAL-STATE UNEMPLOYMENT COMPENSATION (UC) PROGRAM;
CONFIDENTIALITY AND DISCLOSURE OF STATE UC INFORMATION
--Table of Contents



                          Subpart A_In General

Sec.
603.1 What are the purpose and scope of this part?
603.2 What definitions apply to this part?

          Subpart B_Confidentiality and Disclosure Requirements

603.3 What is the purpose and scope of this subpart?
603.4 What is the confidentiality requirement of Federal UC law?
603.5 What are the exceptions to the confidentiality requirement?
603.6 What disclosures are required by this subpart?
603.7 What requirements apply to subpoenas, other compulsory processes, 
          and

[[Page 25]]

          disclosure to officials with subpoena authority?
603.8 What are the requirements for payment of costs and program income?
603.9 What safeguards and security requirements apply to disclosed 
          information?
603.10 What are the requirements for agreements?
603.11 How do States notify claimants and employers about the uses of 
          their information?
603.12 How are the requirements of this part enforced?

 Subpart C_Mandatory Disclosure for Income and Eligibility Verification 
                              System (IEVS)

603.20 What is the purpose and scope of this subpart?
603.21 What is a requesting agency?
603.22 What information must State UC agencies disclose for purposes of 
          an IEVS?
603.23 What information must State UC agencies obtain from other 
          agencies, and crossmatch with wage information, for purposes 
          of an IEVS?

    Authority: 42 U.S.C. 1302(a); Secretary's Order No. 4-75 (40 FR 
18515) and Secretary's Order No. 14-75 (November 12, 1975).

    Source: 71 FR 56842, Sept. 27, 2006, unless otherwise noted.



                          Subpart A_In General



Sec.603.1  What are the purpose and scope of this part?

    The purpose of this part is to implement the requirements of Federal 
UC law concerning confidentiality and disclosure of UC information. This 
part applies to States and State UC agencies, as defined in Sec.
603.2(f) and (g).



Sec.603.2  What definitions apply to this part?

    For the purposes of this part:
    (a)(1) Claim information means information about:
    (i) Whether an individual is receiving, has received, or has applied 
for UC;
    (ii) The amount of compensation the individual is receiving or is 
entitled to receive; and
    (iii) The individual's current (or most recent) home address.
    (2) For purposes of subpart C (IEVS), claim information also 
includes:
    (i) Whether the individual has refused an offer of work and, if so, 
a description of the job offered including the terms, conditions, and 
rate of pay; and
    (ii) Any other information contained in the records of the State UC 
agency that is needed by the requesting agency to verify eligibility 
for, and the amount of, benefits.
    (b) Confidential UC information and confidential information mean 
any UC information, as defined in paragraph (j) of this section, 
required to be kept confidential under Sec.603.4.
    (c) Public domain information means--
    (1) Information about the organization of the State and the State UC 
agency and appellate authorities, including the names and positions of 
officials and employees thereof;
    (2) Information about the State UC law (and applicable Federal law) 
provisions, rules, regulations, and interpretations thereof, including 
statements of general policy and interpretations of general 
applicability; and
    (3) Any agreement of whatever kind or nature, including interstate 
arrangements and reciprocal agreements and any agreement with the 
Department of Labor or the Secretary, relating to the administration of 
the State UC law.
    (d) Public official means an official, agency, or public entity 
within the executive branch of Federal, State, or local government who 
(or which) has responsibility for administering or enforcing a law, or 
an elected official in the Federal, State, or local government.
    (e) Secretary and Secretary of Labor mean the cabinet officer 
heading the United States Department of Labor, or his or her designee.
    (f) State means a State of the United States of America, the 
District of Columbia, the Commonwealth of Puerto Rico, and the United 
States Virgin Islands.
    (g) State UC agency means an agency charged with the administration 
of the State UC law.
    (h) State UC law means the law of a State approved under Section 
3304(a) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)).
    (i) Unemployment compensation (UC) means cash benefits payable to 
individuals with respect to their unemployment.

[[Page 26]]

    (j) UC information and State UC information means information in the 
records of a State or State UC agency that pertains to the 
administration of the State UC law. This term includes those State wage 
reports collected under the IEVS (Section 1137 of the Social Security 
Act (SSA)) that are obtained by the State UC agency for determining UC 
monetary eligibility or are downloaded to the State UC agency's files as 
a result of a crossmatch but does not otherwise include those wage 
reports. It does not include information in a State's Directory of New 
Hires, but does include any such information that has been disclosed to 
the State UC agency for use in the UC program. It also does not include 
the personnel or fiscal information of a State UC agency.
    (k) Wage information means information in the records of a State UC 
agency (and, for purposes of Sec.603.23 (IEVS)), information reported 
under provisions of State law which fulfill the requirements of Section 
1137, SSA) about the--
    (1) Wages paid to an individual,
    (2) Social security account number (or numbers, if more than one) of 
such individual, and
    (3) Name, address, State, and the Federal employer identification 
number of the employer who paid such wages to such individual.



          Subpart B_Confidentiality and Disclosure Requirements



Sec.603.3  What is the purpose and scope of this subpart?

    This subpart implements the basic confidentiality requirement 
derived from Section 303(a)(1), SSA, and the disclosure requirements of 
Sections 303(a)(7), (c)(1), (d), (e), (h), and (i), SSA, and Section 
3304(a)(16), Federal Unemployment Tax Act (FUTA). This subpart also 
establishes uniform minimum requirements for the payment of costs, 
safeguards, and data-sharing agreements when UC information is 
disclosed, and for conformity and substantial compliance with this 
proposed rule. This subpart applies to States and State UC agencies, as 
defined in Sec.603.2(f) and (g), respectively.



Sec.603.4  What is the confidentiality requirement of Federal UC law?

    (a) Statute. Section 303(a)(1) of the SSA (42 U.S.C. 503(a)(1)) 
provides that, for the purposes of certification of payment of granted 
funds to a State under Section 302(a) (42 U.S.C. 502(a)), State law must 
include provision for such methods of administration as are found by the 
Secretary of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.
    (b) Interpretation. The Department of Labor interprets Section 
303(a)(1), SSA, to mean that ``methods of administration'' that are 
reasonably calculated to insure the full payment of UC when due must 
include provision for maintaining the confidentiality of any UC 
information which reveals the name or any identifying particular about 
any individual or any past or present employer or employing unit, or 
which could foreseeably be combined with other publicly available 
information to reveal any such particulars, and must include provision 
for barring the disclosure of any such information, except as provided 
in this part.
    (c) Application. Each State law must contain provisions that are 
interpreted and applied consistently with the interpretation in 
paragraph (b) of this section and with this subpart, and must provide 
penalties for any disclosure of confidential UC information that is 
inconsistent with any provision of this subpart.



Sec.603.5  What are the exceptions to the confidentiality requirement?

    The following are exceptions to the confidentiality requirement. 
Disclosure of confidential UC information is permissible under the 
exceptions in paragraphs (a) through (g) of this section only if 
authorized by State law and if such disclosure does not interfere with 
the efficient administration of the State UC law. Disclosure of 
confidential UC information is permissible under the exceptions in 
paragraphs (h) and (i) of this section without such restrictions.
    (a) Public domain information. The confidentiality requirement of 
Sec.603.4 does not apply to public domain information, as defined at 
Sec.603.2(c).

[[Page 27]]

    (b) UC appeals records. Disclosure of appeals records and decisions, 
and precedential determinations on coverage of employers, employment, 
and wages, is permissible provided all social security account numbers 
have been removed and such disclosure is otherwise consistent with 
Federal and State law.
    (c) Individual or employer. Disclosure for non-UC purposes, of 
confidential UC information about an individual to that individual, or 
of confidential UC information about an employer to that employer, is 
permissible.
    (d) Informed consent. Disclosure of confidential UC information on 
the basis of informed consent is permissible in the following 
circumstances--
    (1) Agent--to one who acts for or in the place of an individual or 
an employer by the authority of that individual or employer if--
    (i) In general--
    (A) The agent presents a written release (which may include an 
electronically submitted release that the State determines is authentic) 
from the individual or employer being represented;
    (B) When a written release is impossible or impracticable to obtain, 
the agent presents such other form of consent as is permitted by the 
State UC agency in accordance with State law;
    (ii) In the case of an elected official performing constituent 
services, the official presents reasonable evidence (such as a letter 
from the individual or employer requesting assistance or a written 
record of a telephone request from the individual or employer) that the 
individual or employer has authorized such disclosure; or
    (iii) In the case of an attorney retained for purposes related to 
the State's UC law, the attorney asserts that he or she is representing 
the individual or employer.
    (2) Third party (other than an agent) or disclosure made on an 
ongoing basis--to a third party that is not acting as an agent or that 
receives confidential information following an informed consent 
disclosure on an ongoing basis (even if such entity is an agent), but 
only if that entity obtains a written release from the individual or 
employer to whom the information pertains.
    (i) The release must be signed and must include a statement--
    (A) Specifically identifying the information that is to be 
disclosed;
    (B) That State government files will be accessed to obtain that 
information;
    (C) Of the specific purpose or purposes for which the information is 
sought and a statement that information obtained under the release will 
only be used for that purpose or purposes; and
    (D) Indicating all the parties who may receive the information 
disclosed.
    (ii) The purpose specified in the release must be limited to--
    (A) Providing a service or benefit to the individual signing the 
release that such individual expects to receive as a result of signing 
the release; or
    (B) Carrying out administration or evaluation of a public program to 
which the release pertains.

    Note to paragraph (d): The Electronic Signatures in Global and 
National Commerce Act of 2000 (E-Sign), Pub. L. 106-229, may apply where 
a party wishes to effectuate electronically an informed consent release 
(Sec.603.5(d)(2)) or a disclosure agreement (Sec.603.10(a)) with an 
entity that uses informed consent releases. E-Sign, among other things, 
sets forth the circumstances under which electronic signatures, 
contracts, and other records relating to such transactions (in lieu of 
paper documents) are legally binding. Thus, an electronic communication 
may suffice under E-Sign to establish a legally binding contract. The 
States will need to consider E-Sign's application to these informed 
consent releases and disclosure agreements. In particular, a State must, 
to conform and substantially comply with this regulation, assure that 
these informed consent releases and disclosure agreements are legally 
enforceable. If an informed consent release or disclosure agreement is 
to be effectuated electronically, the State must determine whether E-
Sign applies to that transaction, and, if so, make certain that the 
transaction satisfies the conditions imposed by E-Sign. The State must 
also make certain that the electronic transaction complies with every 
other condition necessary to make it legally enforceable.

    (e) Public official. Disclosure of confidential UC information to a 
public official for use in the performance of his or her official duties 
is permissible. ``Performance of official duties'' means administration 
or enforcement of law or the execution of the official responsibilities 
of a Federal, State, or local elected official. Administration of law

[[Page 28]]

includes research related to the law administered by the public 
official. Execution of official responsibilities does not include 
solicitation of contributions or expenditures to or on behalf of a 
candidate for public or political office or a political party.
    (f) Agent or contractor of public official. Disclosure of 
confidential UC information to an agent or contractor of a public 
official to whom disclosure is permissible under paragraph (e) of this 
section.
    (g) Bureau of Labor Statistics. The confidentiality requirement does 
not apply to information collected exclusively for statistical purposes 
under a cooperative agreement with the Bureau of Labor Statistics (BLS). 
Further, this part does not restrict or impose any condition on the 
transfer of any other information to the BLS under an agreement, or the 
BLS's disclosure or use of such information.
    (h) Court order; official with subpoena authority. Disclosure of 
confidential UC information in response to a court order or to an 
official with subpoena authority is permissible as specified in Sec.
603.7(b).
    (i) UC Program Oversight and Audits. The confidentiality requirement 
does not apply to any disclosure to a Federal official for purposes of 
UC program oversight and audits, including disclosures under 20 CFR part 
601 and 29 CFR parts 96 and 97.



Sec.603.6  What disclosures are required by this subpart?

    (a) The confidentiality requirement of 303(a)(1), SSA, and Sec.
603.4 are not applicable to this paragraph (a) and the Department of 
Labor interprets Section 303(a)(1), SSA, as requiring disclosure of all 
information necessary for the proper administration of the UC program. 
This includes disclosures to claimants, employers, the Internal Revenue 
Service (for purposes of UC tax administration), and the U.S. 
Citizenship and Immigration Services (for purposes of verifying a 
claimant's immigration status).
    (b) In addition to Section 303(f), SSA (concerning an IEVS), which 
is addressed in subpart C, the following provisions of Federal UC law 
also specifically require disclosure of State UC information and State-
held information pertaining to the Federal UC and benefit programs of 
Unemployment Compensation for Federal Employees (UCFE), Unemployment 
Compensation for Ex-Servicemembers (UCX), Trade Adjustment Assistance 
(TAA) (except for confidential business information collected by 
States), Disaster Unemployment Assistance (DUA), and any Federal UC 
benefit extension program:
    (1) Section 303(a)(7), SSA, requires State law to provide for making 
available, upon request, to any agency of the United States charged with 
the administration of public works or assistance through public 
employment, disclosure of the following information with respect to each 
recipient of UC--
    (i) Name;
    (ii) Address;
    (iii) Ordinary occupation;
    (iv) Employment status; and
    (v) A statement of such recipient's rights to further compensation 
under the State law.
    (2) Section 303(c)(1), SSA, requires each State to make its UC 
records available to the Railroad Retirement Board, and to furnish such 
copies of its UC records to the Railroad Retirement Board as the Board 
deems necessary for its purposes.
    (3) Section 303(d)(1), SSA, requires each State UC agency, for 
purposes of determining an individual's eligibility benefits, or the 
amount of benefits, under a food stamp program established under the 
Food Stamp Act of 1977, to disclose, upon request, to officers and 
employees of the Department of Agriculture, and to officers or employees 
of any State food stamp agency, any of the following information 
contained in the records of the State UC agency--
    (i) Wage information,
    (ii) Whether an individual is receiving, has received, or has made 
application for, UC, and the amount of any such compensation being 
received, or to be received, by such individual,
    (iii) The current (or most recent) home address of such individual, 
and
    (iv) Whether an individual has refused an offer of employment and, 
if so, a description of the employment so offered and the terms, 
conditions, and rate of pay therefore.

[[Page 29]]

    (4) Section 303(e)(1), SSA, requires each State UC agency to 
disclose, upon request, directly to officers or employees of any State 
or local child support enforcement agency, any wage information 
contained in the records of the State UC agency for purposes of 
establishing and collecting child support obligations (not to include 
custodial parent support obligations) from, and locating, individuals 
owing such obligations.
    (5) Section 303(h), SSA, requires each State UC agency to disclose 
quarterly, to the Secretary of Health and Human Services (HHS), wage 
information and claim information as required under Section 453(i)(1) of 
the SSA (establishing the National Directory of New Hires), contained in 
the records of such agency, for purposes of Subsections (i)(1), (i)(3), 
and (j) of Section 453, SSA (establishing the National Directory of New 
Hires and its uses for purposes of child support enforcement, Temporary 
Assistance to Needy Families (TANF), TANF research, administration of 
the earned income tax credit, and use by the Social Security 
Administration).
    (6) Section 303(i), SSA, requires each State UC agency to disclose, 
upon request, to officers or employees of the Department of Housing and 
Urban Development (HUD) and to representatives of a public housing 
agency, for purposes of determining an individual's eligibility for 
benefits, or the amount of benefits, under a housing assistance program 
of HUD, any of the following information contained in the records of 
such State agency about any individual applying for or participating in 
any housing assistance program administered by HUD who has signed a 
consent form approved by the Secretary of HUD--
    (i) Wage information, and
    (ii) Whether the individual is receiving, has received, or has made 
application for, UC, and the amount of any such compensation being 
received (or to be received) by such individual.
    (7) Section 3304(a)(16), FUTA requires each State UC agency--
    (i) To disclose, upon request, to any State or political subdivision 
thereof administering a Temporary Assistance to Needy Families Agency 
(TANF) program funded under part A of Title IV of the SSA, wage 
information contained in the records of the State UC agency which is 
necessary (as determined by the Secretary of HHS in regulations) for 
purposes of determining an individual's eligibility for TANF assistance 
or the amount of TANF assistance; and
    (ii) To furnish to the Secretary of HHS, in accordance with that 
Secretary's regulations at 45 CFR 303.108, wage information (as defined 
at 45 CFR 303.108(a)(2)) and UC information (as defined at 45 CFR 
303.108(a)(3)) contained in the records of such agency for the purposes 
of the National Directory of New Hires established under Section 453(i) 
of the SSA.
    (c) Each State law must contain provisions that are interpreted and 
applied consistently with the requirements listed in this section.



Sec.603.7  What requirements apply to subpoenas, other compulsory
processes, and disclosure to officials with subpoena authority?

    (a) In general. Except as provided in paragraph (b) of this section, 
when a subpoena or other compulsory process is served upon a State UC 
agency or the State, any official or employee thereof, or any recipient 
of confidential UC information, which requires the production of 
confidential UC information or appearance for testimony upon any matter 
concerning such information, the State or State UC agency or recipient 
must file and diligently pursue a motion to quash the subpoena or other 
compulsory process if other means of avoiding the disclosure of 
confidential UC information are not successful or if the court has not 
already ruled on the disclosure. Only if such motion is denied by the 
court or other forum may the requested confidential UC information be 
disclosed, and only upon such terms as the court or forum may order, 
such as that the recipient protect the disclosed information and pay the 
State's or State UC agency's costs of disclosure.
    (b) Exceptions. The requirement of paragraph (a) of this section to 
move to quash subpoenas shall not be applicable, so that disclosure is 
permissible, where--
    (1) Court Decision--a subpoena or other compulsory legal process has

[[Page 30]]

been served and a court has previously issued a binding precedential 
decision that requires disclosures of this type, or a well-established 
pattern of prior court decisions have required disclosures of this type, 
or
    (2) Official with subpoena authority--Confidential UC information 
has been subpoenaed, by a local, State or Federal governmental official, 
other than a clerk of court on behalf of a litigant, with authority to 
obtain such information by subpoena under State or Federal law. The 
State or State UC agency may choose to disclose such confidential UC 
information to these officials without the actual issuance of a 
subpoena.



Sec.603.8  What are the requirements for payment of costs and program income?

    (a) In general. Except as provided in paragraph (b) of this section, 
grant funds must not be used to pay any of the costs of making any 
disclosure of UC information. Grant funds may not be used to pay any of 
the costs of making any disclosures under Sec.603.5(d)(2) (third party 
(other than an agent) or disclosure made on an ongoing basis), Sec.
603.5(e) (optional disclosure to a public official), Sec.603.5(f) 
(optional disclosure to an agent or contractor of a public official), 
and Sec.603.5(g) (optional disclosure to BLS), Sec.603.6(b) 
(mandatory disclosures for non-UC purposes), or Sec.603.22 (mandatory 
disclosure for purposes of an IEVS).
    (b) Use of grant funds permitted. Grant funds paid to a State under 
Section 302(a), SSA, may be used to pay the costs of only those 
disclosures necessary for proper administration of the UC program. (This 
may include some disclosures under Sec.603.5(a) (concerning public 
domain information), Sec.603.5(c) (to an individual or employer), and 
Sec.603.5(d)(1) (to an agent).) In addition, grant funds may be used 
to pay costs of disclosures under Sec.603.5(i) (for UC Program 
Oversight and Audits) and Sec.603.6(a) (for the proper administration 
of the UC program). Grant funds may also be used to pay costs associated 
with disclosures under Sec.603.7(b)(1) (concerning court-ordered 
compliance with subpoenas) if a court has denied recovery of costs, or 
to pay costs associated with disclosures under Sec.603.7(b)(2) (to 
officials with subpoena authority) if the State UC agency has attempted 
but not been successful in obtaining reimbursement of costs. Finally, 
grant funds may be used to pay costs associated with any disclosure of 
UC information if not more than an incidental amount of staff time and 
no more than nominal processing costs are involved in making the 
disclosure.
    (c) Calculation of costs. The costs to a State or State UC agency of 
processing and handling a request for disclosure of information must be 
calculated in accordance with the cost principles and administrative 
requirements of 29 CFR part 97 and Office of Management and Budget 
Circular No. A-87 (Revised). For the purpose of calculating such costs, 
any initial start-up costs incurred by the State UC agency in 
preparation for making the requested disclosure(s), such as computer 
reprogramming necessary to respond to the request, and the costs of 
implementing safeguards and agreements required by Sec. Sec.603.9 and 
603.10, must be charged to and paid by the recipient. (Start-up costs do 
not include the costs to the State UC agency of obtaining, compiling, or 
maintaining information for its own purposes.) Postage or other delivery 
costs incurred in making any disclosure are part of the costs of making 
the disclosure. Penalty mail, as defined in 39 U.S.C. 3201(1), must not 
be used to transmit information being disclosed, except information 
disclosed for purposes of administration of State UC law. As provided in 
Sections 453(e)(2) and 453(g) of the SSA, the Secretary of HHS has the 
authority to determine what constitutes a reasonable amount for the 
reimbursement for disclosures under Section 303(h), SSA, and Section 
3304(a)(16)(B), FUTA.
    (d) Payment of costs. The costs to a State or State UC agency of 
making a disclosure of UC information, calculated in accordance with 
paragraph (c) of this section, must be paid by the recipient of the 
information or another source paying on behalf of the recipient, either 
in advance or by way of reimbursement. If the recipient is not a public 
official, such costs, except for good reason must be paid in advance. 
For the purposes of this paragraph (d),

[[Page 31]]

payment in advance means full payment of all costs before or at the time 
the disclosed information is given in hand or sent to the recipient. The 
requirement of payment of costs in this paragraph is met when a State UC 
agency has in place a reciprocal cost agreement or arrangement with the 
recipient. As used in this section, reciprocal means that the relative 
benefits received by each are approximately equal. Payment or 
reimbursement of costs must include any initial start-up costs 
associated with making the disclosure.
    (e) Program income. Costs paid as required by this section, and any 
funds generated by the disclosure of UC information under this part, are 
program income and may be used only as permitted by 29 CFR 97.25(g) (on 
program income). Such income may not be used to benefit a State's 
general fund or other program.



Sec.603.9  What safeguards and security requirements apply to disclosed
information?

    (a) In general. For disclosures of confidential UC information under 
Sec.603.5(d)(2) (to a third party (other than an agent) or disclosures 
made on an ongoing basis); Sec.603.5(e) (to a public official), except 
as provided in paragraph (d) of this section; Sec.603.5(f) (to an 
agent or contractor of a public official); Sec.603.6(b)(1) through 
(4), (6), and (7)(i) (as required by Federal UC law); and Sec.603.22 
(to a requesting agency for purposes of an IEVS), a State or State UC 
agency must require the recipient to safeguard the information disclosed 
against unauthorized access or redisclosure, as provided in paragraphs 
(b) and (c) of this section, and must subject the recipient to penalties 
provided by the State law for unauthorized disclosure of confidential UC 
information.
    (b) Safeguards to be required of recipients. (1) The State or State 
UC agency must:
    (i) Require the recipient to use the disclosed information only for 
purposes authorized by law and consistent with an agreement that meets 
the requirements of Sec.603.10;
    (ii) Require the recipient to store the disclosed information in a 
place physically secure from access by unauthorized persons;
    (iii) Require the recipient to store and process disclosed 
information maintained in electronic format, such as magnetic tapes or 
discs, in such a way that unauthorized persons cannot obtain the 
information by any means;
    (iv) Require the recipient to undertake precautions to ensure that 
only authorized personnel are given access to disclosed information 
stored in computer systems;
    (v) Require each recipient agency or entity to:
    (A) Instruct all personnel having access to the disclosed 
information about confidentiality requirements, the requirements of this 
subpart B, and the sanctions specified in the State law for unauthorized 
disclosure of information, and
    (B) Sign an acknowledgment that all personnel having access to the 
disclosed information have been instructed in accordance with paragraph 
(b)(1)(v)(A) of this section and will adhere to the State's or State UC 
agency's confidentiality requirements and procedures which are 
consistent with this subpart B and the agreement required by Sec.
603.10, and agreeing to report any infraction of these rules to the 
State UC agency fully and promptly,
    (vi) Require the recipient to dispose of information disclosed or 
obtained, and any copies thereof made by the recipient agency, entity, 
or contractor, after the purpose for which the information is disclosed 
is served, except for disclosed information possessed by any court. 
Disposal means return of the information to the disclosing State or 
State UC agency or destruction of the information, as directed by the 
State or State UC agency. Disposal includes deletion of personal 
identifiers by the State or State UC agency in lieu of destruction. In 
any case, the information disclosed must not be retained with personal 
identifiers for longer than such period of time as the State or State UC 
agency deems appropriate on a case-by-case basis; and
    (vii) Maintain a system sufficient to allow an audit of compliance 
with the requirements of this part.

[[Page 32]]

    (2) In the case of disclosures made under Sec.603.5(d)(2) (to a 
third party (other than an agent) or disclosures made on an ongoing 
basis), the State or State UC agency must also--
    (i) Periodically audit a sample of transactions accessing 
information disclosed under that section to assure that the entity 
receiving disclosed information has on file a written release 
authorizing each access. The audit must ensure that the information is 
not being used for any unauthorized purpose;
    (ii) Ensure that all employees of entities receiving access to 
information disclosed under Sec.603.5(d)(2) are subject to the same 
confidentiality requirements, and State criminal penalties for violation 
of those requirements, as are employees of the State UC agency.
    (c) Redisclosure of confidential UC information. (1) A State or 
State UC agency may authorize any recipient of confidential UC 
information under paragraph (a) of this section to redisclose 
information only as follows:
    (i) To the individual or employer who is the subject of the 
information;
    (ii) To an attorney or other duly authorized agent representing the 
individual or employer;
    (iii) In any civil or criminal proceedings for or on behalf of a 
recipient agency or entity;
    (iv) In response to a subpoena only as provided in Sec.603.7;
    (v) To an agent or contractor of a public official only if the 
person redisclosing is a public official, if the redisclosure is 
authorized by the State law, and if the public official retains 
responsibility for the uses of the confidential UC information by the 
agent or contractor;
    (vi) From one public official to another if the redisclosure is 
authorized by the State law;
    (vii) When so authorized by Section 303(e)(5), SSA, (redisclosure of 
wage information by a State or local child support enforcement agency to 
an agent under contract with such agency for purposes of carrying out 
child support enforcement) and by State law; or
    (viii) When specifically authorized by a written release that meets 
the requirements of Sec.603.5(d) (to a third party with informed 
consent).
    (2) Information redisclosed under paragraphs (c)(1)(v) and (vi) of 
this section must be subject to the safeguards in paragraph (b) of this 
section.
    (d) The requirements of this section do not apply to disclosures of 
UC information to a Federal agency which the Department has determined, 
by notice published in the Federal Register, to have in place safeguards 
adequate to satisfy the confidentiality requirement of Section 
303(a)(1), SSA.



Sec.603.10  What are the requirements for agreements?

    (a) Requirements. (1) For disclosures of confidential UC information 
under Sec.603.5(d)(2) (to a third party (other than an agent) or 
disclosures made on an ongoing basis); Sec.603.5(e) (to a public 
official), except as provided in paragraph (d) of this section; Sec.
603.5(f) (to an agent or contractor of a public official); Sec.
603.6(b)(1) through (4), (6), and (7)(i) (as required by Federal UC 
law); and Sec.603.22 (to a requesting agency for purposes of an IEVS), 
a State or State UC agency must enter into a written, enforceable 
agreement with any agency or entity requesting disclosure(s) of such 
information. The agreement must be terminable if the State or State UC 
agency determines that the safeguards in the agreement are not adhered 
to.
    (2) For disclosures referred to in Sec.603.5(f) (to an agent or 
contractor of a public official), the State or State UC agency must 
enter into a written, enforceable agreement with the public official on 
whose behalf the agent or contractor will obtain information. The 
agreement must hold the public official responsible for ensuring that 
the agent or contractor complies with the safeguards of Sec.603.9. The 
agreement must be terminable if the State or State UC agency determines 
that the safeguards in the agreement are not adhered to.
    (b) Contents of agreement--(1) In general. Any agreement required by 
paragraph (a) of this section must include, but need not be limited to, 
the following terms and conditions:
    (i) A description of the specific information to be furnished and 
the purposes for which the information is sought;
    (ii) A statement that those who request or receive information under 
the

[[Page 33]]

agreement will be limited to those with a need to access it for purposes 
listed in the agreement;
    (iii) The methods and timing of requests for information and 
responses to those requests, including the format to be used;
    (iv) Provision for paying the State or State UC agency for any costs 
of furnishing information, as required by Sec.603.8 (on costs);
    (v) Provision for safeguarding the information disclosed, as 
required by Sec.603.9 (on safeguards); and
    (vi) Provision for on-site inspections of the agency, entity, or 
contractor, to assure that the requirements of the State's law and the 
agreement or contract required by this section are being met.
    (2) In the case of disclosures under Sec.603.5(d)(2) (to a third 
party (other than an agent) or disclosures made on an ongoing basis), 
the agreement required by paragraph (a) of this section must assure that 
the information will be accessed by only those entities with 
authorization under the individual's or employer's release, and that it 
may be used only for the specific purposes authorized in that release.
    (c) Breach of agreement--(1) In general. If an agency, entity, or 
contractor, or any official, employee, or agent thereof, fails to comply 
with any provision of an agreement required by this section, including 
timely payment of the State's or State UC agency's costs billed to the 
agency, entity, or contractor, the agreement must be suspended, and 
further disclosure of information (including any disclosure being 
processed) to such agency, entity, or contractor is prohibited, until 
the State or State UC agency is satisfied that corrective action has 
been taken and there will be no further breach. In the absence of prompt 
and satisfactory corrective action, the agreement must be canceled, and 
the agency, entity, or contractor must be required to surrender to the 
State or State UC agency all confidential UC information (and copies 
thereof) obtained under the agreement which has not previously been 
returned to the State or State UC agency, and any other information 
relevant to the agreement.
    (2) Enforcement. In addition to the actions required to be taken by 
paragraph (c)(1) of this section, the State or State UC agency must 
undertake any other action under the agreement, or under any law of the 
State or of the United States, to enforce the agreement and secure 
satisfactory corrective action or surrender of the information, and must 
take other remedial actions permitted under State or Federal law to 
effect adherence to the requirements of this subpart B, including 
seeking damages, penalties, and restitution as permitted under such law 
for any charges to granted funds and all costs incurred by the State or 
the State UC agency in pursuing the breach of the agreement and 
enforcement as required by this paragraph (c).
    (d) The requirements of this section do not apply to disclosures of 
UC information to a Federal agency which the Department has determined, 
by notice published in the Federal Register, to have in place safeguards 
adequate to satisfy the confidentiality requirement of Section 
303(a)(1), SSA, and an appropriate method of paying or reimbursing the 
State UC agency (which may involve a reciprocal cost arrangement) for 
costs involved in such disclosures. These determinations will be 
published in the Federal Register.



Sec.603.11  How do States notify claimants and employers about the 
uses of their information?

    (a) Claimants. Every claimant for compensation must be notified, at 
the time of application, and periodically thereafter, that confidential 
UC information pertaining to the claimant may be requested and utilized 
for other governmental purposes, including, but not limited to, 
verification of eligibility under other government programs. Notice on 
or attached to subsequent additional claims will satisfy the requirement 
for periodic notice thereafter.
    (b) Employers. Every employer subject to a State's law must be 
notified that wage information and other confidential UC information may 
be requested and utilized for other governmental purposes, including, 
but not limited to, verification of an individual's eligibility for 
other government programs.

[[Page 34]]



Sec.603.12  How are the requirements of this part enforced?

    (a) Resolving conformity and compliance issues. For the purposes of 
resolving issues of conformity and substantial compliance with the 
requirements set forth in subparts B and C, the provisions of 20 CFR 
601.5(b) (informal discussions with the Department of Labor to resolve 
conformity and substantial compliance issues), and 20 CFR 601.5(d) 
(Secretary of Labor's hearing and decision on conformity and substantial 
compliance) apply.
    (b) Conformity and substantial compliance. Whenever the Secretary of 
Labor, after reasonable notice and opportunity for a hearing to the 
State UC agency of a State, finds that the State law fails to conform, 
or that the State or State UC agency fails to comply substantially, 
with:
    (1) The requirements of Title III, SSA, implemented in subparts B 
and C of this part, the Secretary of Labor shall notify the Governor of 
the State and such State UC agency that further payments for the 
administration of the State UC law 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 Department of 
Labor shall make no further payments to such State.
    (2) The FUTA requirements implemented in this subpart B, the 
Secretary of Labor shall make no certification under that section to the 
Secretary of the Treasury for such State as of October 31 of the 12-
month period for which such finding is made.



 Subpart C_Mandatory Disclosure for Income and Eligibility Verification 
                              System (IEVS)



Sec.603.20  What is the purpose and scope of this subpart?

    (a) Purpose. Subpart C implements Section 303(f), SSA. Section 
303(f) requires States to have in effect an income and eligibility 
verification system, which meets the requirements of Section 1137, SSA, 
under which information is requested and exchanged for the purpose of 
verifying eligibility for, and the amount of, benefits available under 
several federally assisted programs, including the Federal-State UC 
program.
    (b) Scope. This subpart C applies only to a State UC agency.

    Note to paragraph (b): Although not implemented in this part 603, 
Section 1137(a)(1), SSA, provides that each State must require claimants 
for compensation to furnish to the State UC agency their social security 
account numbers, as a condition of eligibility for compensation, and 
further requires States to utilize such account numbers in the 
administration of the State UC laws. Section 1137(a)(3), SSA, further 
provides that employers must make quarterly wage reports to a State UC 
agency, or an alternative agency, for use in verifying eligibility for, 
and the amount of, benefits. Section 1137(d)(1), SSA, provides that each 
State must require claimants for compensation, as a condition of 
eligibility, to declare in writing, under penalty of perjury, whether 
the individual is a citizen or national of the United States, and, if 
not, that the individual is in a satisfactory immigration status. Other 
provisions of Section 1137(d), SSA, not implemented in this regulation 
require the States to obtain, and individuals to furnish, information 
which shows immigration status, and require the States to verify 
immigration status with the Bureau of Citizenship and Immigration 
Services.



Sec.603.21  What is a requesting agency?

    For the purposes of this subpart C, requesting agency means:
    (a) Temporary Assistance to Needy Families Agency--Any State or 
local agency charged with the responsibility of administering a program 
funded under part A of Title IV of the SSA.
    (b) Medicaid Agency--Any State or local agency charged with the 
responsibility of administering the provisions of the Medicaid program 
under a State plan approved under Title XIX of the SSA.
    (c) Food Stamp Agency--Any State or local agency charged with the 
responsibility of administering the provisions of the Food Stamp Program 
under the Food Stamp Act of 1977.
    (d) Other SSA Programs Agency--Any State or local agency charged 
with the responsibility of administering a program under a State plan 
approved under Title I, X, XIV, or XVI (Supplemental Security Income for 
the Aged, Blind, and Disabled) of the SSA.
    (e) Child Support Enforcement Agency--Any State or local child 
support

[[Page 35]]

enforcement agency charged with the responsibility of enforcing child 
support obligations under a plan approved under part D of Title IV of 
the SSA.
    (f) Social Security Administration--Commissioner of the Social 
Security Administration in establishing or verifying eligibility or 
benefit amounts under Titles II (Old-Age, Survivors, and Disability 
Insurance Benefits) and XVI (Supplemental Security Income for the Aged, 
Blind, and Disabled) of the SSA.



Sec.603.22  What information must State UC agencies disclose for 
purposes of an IEVS?

    (a) Disclosure of information. Each State UC agency must disclose, 
upon request, to any requesting agency, as defined in Sec.603.21, that 
has entered into an agreement required by Sec.603.10, wage information 
(as defined at Sec.603.2(k)) and claim information (as defined at 
Sec.603.2(a)) contained in the records of such State UC agency.
    (b) Format. The State UC agency must adhere to standardized formats 
established by the Secretary of HHS (in consultation with the Secretary 
of Agriculture) and set forth in 42 CFR 435.960 (concerning standardized 
formats for furnishing and obtaining information to verify income and 
eligibility).



Sec.603.23  What information must State UC agencies obtain from other 
agencies, and crossmatch with wage information, for purposes of an IEVS?

    (a) Crossmatch with information from requesting agencies. Each State 
UC agency must obtain such information from the Social Security 
Administration and any requesting agency as may be needed in verifying 
eligibility for, and the amount of, compensation payable under the State 
UC law.
    (b) Crossmatch of wage and benefit information. The State UC agency 
must crossmatch quarterly wage information with UC payment information 
to the extent that such information is likely, as determined by the 
Secretary of Labor, to be productive in identifying ineligibility for 
benefits and preventing or discovering incorrect payments.



PART 604_REGULATIONS FOR ELIGIBILITY FOR UNEMPLOYMENT COMPENSATION
--Table of Contents



Sec.
604.1 Purpose and scope.
604.2 Definitions.
604.3 Able and available requirement--general principles.
604.4 Application--ability to work.
604.5 Application--availability for work.
604.6 Conformity and substantial compliance.

    Authority: 42 U.S.C. 1302(a); 42 U.S.C. 503(a)(2) and (5); 26 U.S.C. 
3304(a)(1) and (4); 26 U.S.C. 3306(h); 42 U.S.C. 1320b-7(d); Secretary's 
Order No. 4-75 (40 FR 18515); and Secretary's Order No. 14-75 (November 
12, 1975).

    Source: 72 FR 1893, Jan. 16, 2007, unless otherwise noted.



Sec.604.1  Purpose and scope.

    The purpose of this Part is to implement the requirements of Federal 
UC law that limit a State's payment of UC to individuals who are able to 
work and available for work. This regulation applies to all State UC 
laws and programs.



Sec.604.2  Definitions.

    (a) Department means the United States Department of Labor.
    (b) FUTA means the Federal Unemployment Tax Act, 26 U.S.C. 3301 et 
seq.
    (c) Social Security Act means the Social Security Act, 42 U.S.C. 501 
et seq.
    (d) State means a State of the United States of America, the 
District of Columbia, the Commonwealth of Puerto Rico, and the United 
States Virgin Islands.
    (e) State UC agency means the agency of the State charged with the 
administration of the State's UC law.
    (f) State UC law means the law of a State approved under Section 
3304(a), FUTA (26 U.S.C. 3304(a)).
    (g) Unemployment Compensation (UC) means cash benefits payable to 
individuals with respect to their unemployment.
    (h) Week of unemployment means a week of total, part-total or 
partial unemployment as defined in the State's UC law.

[[Page 36]]



Sec.604.3  Able and available requirement--general principles.

    (a) A State may pay UC only to an individual who is able to work and 
available for work for the week for which UC is claimed.
    (b) Whether an individual is able to work and available for work 
under paragraph (a) of this section must be tested by determining 
whether the individual is offering services for which a labor market 
exists. This requirement does not mean that job vacancies must exist, 
only that, at a minimum, the type of services the individual is able and 
available to perform is generally performed in the labor market. The 
State must determine the geographical scope of the labor market for an 
individual under its UC law.
    (c) The requirement that an individual be able to work and available 
for work applies only to the week of unemployment for which UC is 
claimed. It does not apply to the reasons for the individual's 
separation from employment, although the separation may indicate the 
individual was not able to work or available for work during the week 
the separation occurred. This Part does not address the authority of 
States to impose disqualifications with respect to separations. This 
Part does not limit the States' ability to impose additional able and 
available requirements that are consistent with applicable Federal laws.



Sec.604.4  Application--ability to work.

    (a) A State may consider an individual to be able to work during the 
week of unemployment claimed if the individual is able to work for all 
or a portion of the week claimed, provided any limitation on his or her 
ability to work does not constitute a withdrawal from the labor market.
    (b) If an individual has previously demonstrated his or her ability 
to work and availability for work following the most recent separation 
from employment, the State may consider the individual able to work 
during the week of unemployment claimed despite the individual's illness 
or injury, unless the individual has refused an offer of suitable work 
due to such illness or injury.



Sec.604.5  Application--availability for work.

    (a) General application. A State may consider an individual to be 
available for work during the week of unemployment claimed under any of 
the following circumstances:
    (1) The individual is available for any work for all or a portion of 
the week claimed, provided that any limitation placed by the individual 
on his or her availability does not constitute a withdrawal from the 
labor market.
    (2) The individual limits his or her availability to work which is 
suitable for such individual as determined under the State UC law, 
provided the State law definition of suitable work does not permit the 
individual to limit his or her availability in such a way that the 
individual has withdrawn from the labor market. In determining whether 
the work is suitable, States may, among other factors, take into 
consideration the education and training of the individual, the 
commuting distance from the individual's home to the job, the previous 
work history of the individual (including salary and fringe benefits), 
and how long the individual has been unemployed.
    (3) The individual is on temporary lay-off and is available to work 
only for the employer that has temporarily laid-off the individual.
    (b) Jury service. If an individual has previously demonstrated his 
or her availability for work following the most recent separation from 
employment and is appearing for duty before any court under a lawfully 
issued summons during the week of unemployment claimed, a State may 
consider the individual to be available for work. For such an 
individual, attendance at jury duty may be taken as evidence of 
continued availability for work. However, if the individual does not 
appear as required by the summons, the State must determine if the 
reason for non-attendance indicates that the individual is not able to 
work or is not available for work.
    (c) Approved training. A State must not deny UC to an individual for 
failure to be available for work during a week if, during such week, the 
individual is in training with the approval of the

[[Page 37]]

State agency. However, if the individual fails to attend or otherwise 
participate in such training, the State must determine if the reason for 
non-attendance or non-participation indicates that the individual is not 
able to work or is not available for work.
    (d) Self-employment assistance. A State must not deny UC to an 
individual for failure to be available for work during a week if, during 
such week, the individual is participating in a self-employment 
assistance program and meets all the eligibility requirements of such 
self-employment assistance program.
    (e) Short-time compensation. A State must not deny UC to an 
individual participating in a short-time compensation (also known as 
worksharing) program under State UC law for failure to be available for 
work during a week, but such individual will be required to be available 
for his or her normal workweek.
    (f) Alien status. To be considered available for work in the United 
States for a week, the alien must be legally authorized to work that 
week in the United States by the appropriate agency of the United States 
government. In determining whether an alien is legally authorized to 
work in the United States, the State must follow the requirements of 
section 1137(d) of the SSA (42 U.S.C. 1320b-7(d)), which relate to 
verification of and determination of an alien's status.
    (g) Relation to ability to work requirement. A State may consider an 
individual available for work if the State finds the individual able to 
work under Sec.604.4(b) despite illness or injury.
    (h) Work search. The requirement that an individual be available for 
work does not require an active work search on the part of the 
individual. States may, however, require an individual to be actively 
seeking work to be considered available for work, or States may impose a 
separate requirement that the individual must actively seek work.



Sec.604.6  Conformity and substantial compliance.

    (a) In general. A State's UC law must conform with, and the 
administration of its law must substantially comply with, the 
requirements of this regulation for purposes of certification under:
    (1) Section 3304(c) of the FUTA (26 U.S.C. 3304(c)), with respect to 
whether employers are eligible to receive credit against the Federal 
unemployment tax established by section 3301 of the FUTA (26 U.S.C. 
3301), and
    (2) Section 302 of the SSA (42 U.S.C. 502), with respect to whether 
a State is eligible to receive Federal grants for the administration of 
its UC program.
    (b) Resolving Issues of Conformity and Substantial Compliance. For 
the purposes of resolving issues of conformity and substantial 
compliance with the requirements of this regulation, the following 
provisions of 20 CFR 601.5 apply:
    (1) Paragraph (b) of this section, pertaining to informal 
discussions with the Department of Labor to resolve conformity and 
substantial compliance issues, and
    (2) Paragraph (d) of this section, pertaining to the Secretary of 
Labor's hearing and decision on conformity and substantial compliance.
    (c) Result of failure to conform or substantially comply--(1) FUTA 
requirements. Whenever the Secretary of Labor, after reasonable notice 
and opportunity for a hearing to the State UC agency, finds that the 
State UC law fails to conform, or that the State or State UC agency 
fails to comply substantially, with the requirements of the FUTA, as 
implemented in this regulation, then the Secretary of Labor shall make 
no certification under such act to the Secretary of the Treasury for 
such State as of October 31 of the 12-month period for which such 
finding is made. Further, the Secretary of Labor must notify the 
Governor of the State and such State UC agency that further payments for 
the administration of the State UC law will not be made to the State.
    (2) SSA requirements. Whenever the Secretary of Labor, after 
reasonable notice and opportunity for a hearing to the State UC agency, 
finds that the State UC law fails to conform, or that the State or State 
UC agency fails to comply substantially, with the requirements of title 
III, SSA (42 U.S.C. 501-504), as implemented in this regulation,

[[Page 38]]

then the Secretary of Labor must notify the Governor of the State and 
such State UC agency that further payments for the administration of the 
State UC law 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 Department of Labor will not 
make further payments to such State.



PART 606_TAX CREDITS UNDER THE FEDERAL UNEMPLOYMENT TAX ACT; 
ADVANCES UNDER TITLE XII OF THE SOCIAL SECURITY ACT
--Table of Contents



                            Subpart A_General

Sec.
606.1 Purpose and scope.
606.2 Total credits allowable.
606.3 Definitions.
606.4 Redelegation of authority.
606.5 Verification of estimates and review of determinations.
606.6 Information, reports, and studies.

Subpart B--Tax Credit Reduction [Reserved]

               Subpart C_Relief From Tax Credit Reduction

606.20 Cap on tax credit reduction.
606.21 Criteria for cap.
606.22 Application for cap.
606.23 Avoidance of tax credit reduction.
606.24 Application for avoidance.
606.25 Waiver of and substitution for additional tax credit reduction.
606.26 Application for waiver and substitution.

                     Subpart D_Interest on Advances

606.30 Interest rates on advances.
606.31 Due dates for payment of interest. [Reserved]
606.32 Types of advances subject to interest.
606.33 No payment of interest from unemployment fund. [Reserved]
606.34 Reports of interest payable. [Reserved]
606.35 Order of application for repayments. [Reserved]

                 Subpart E_Relief from Interest Payment

606.40 May/September delay.
606.41 High unemployment deferral.
606.42 High unemployment delay.
606.44 Notification of determinations.

    Authority: 42 U.S.C. 1102; 42 U.S.C. 1322(b)(2)(C); 26 U.S.C. 
7805(a); Secretary's Order No. 3-2007, April 3, 2007 (72 FR 15907).

    Source: 53 FR 37429, Sept. 26, 1988, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 606 appear at 71 FR 
35513, June 21, 2006.



                            Subpart A_General



Sec.606.1  Purpose and scope.

    (a) In general. The regulations in this part 606 are issued to 
implement the tax credit provisions of the Federal Unemployment Tax Act, 
and the loan provisions of title XII of the Social Security Act. The 
regulations on tax credits cover all of the subjects of 3302 of the 
Federal Unemployment Tax Act (FUTA), except subsections (c)(3) and (e). 
The regulations on loans cover all of the subjects in title XII of the 
Social Security Act.
    (b) Scope. This part 606 covers general matters relating to this 
part in this subpart A, and in the following subparts includes specific 
subjects described in general terms as follows:
    (1) Subpart B describes the tax credit reductions under the Federal 
Unemployment Tax Act, which relate to outstanding balances of advances 
made under title XII of the Social Security Act.
    (2) Subpart C describes the various forms of relief from tax credit 
reductions, and the criteria and standards for grant of such relief in 
the form of--
    (i) A cap on tax credit reduction,
    (ii) Avoidance of tax credit reduction, and
    (iii) Waiver of and substitution for additional tax credit 
reduction.
    (3) Subpart D describes the interest rates on advances made under 
title XII of the Social Security Act, dues dates for payment of 
interest, and other related matters.
    (4) Subpart E describes the various forms of relief from payment of 
interest, and the criteria and standards for grant of such relief in the 
form of--
    (i) May/September delay of interest payments,
    (ii) High unemployment deferral of interest payments,
    (iii) High unemployment delay of interest payments, and

[[Page 39]]

    (iv) Maintenance of solvency effort required to retain a deferral 
previously granted.



Sec.606.2  Total credits allowable.

    The total credits allowed to an employer subject to the tax imposed 
by section 3301 of the Federal Unemployment Tax Act shall not exceed 5.4 
percent with respect to taxable years beginning after December 31, 1984.



Sec.606.3  Definitions.

    For the purposes of the Acts cited and this part--
    Act means as appropriate the Federal Unemployment Tax Act (26 U.S.C. 
3301-3311), or title XII of the Social Security Act (42 U.S.C. 1321-
1324).
    Advance means a transfer of funds to a State unemployment fund, for 
the purpose of paying unemployment compensation, from the Federal 
unemployment account in the Unemployment Trust Fund, pursuant to section 
1202 of the Social Security Act.
    Average High Cost Multiple (AHCM) for a State as of December 31 of a 
calendar year is calculated by dividing the State's reserve ratio, as 
defined in Sec.606.3, by the State's average high cost rate (AHCR), as 
defined in Sec.606.3, for the same year. Final calculations are 
rounded to the nearest multiple of 0.01.
    Average High Cost Rate (AHCR) for a State is calculated as follows:
    (1) Determine the time period over which calculations are to be made 
by selecting the longer of:
    (i) The 20-calendar year period that ends with the year for which 
the AHCR calculation is made; or
    (ii) The number of years beginning with the calendar year in which 
the first of the last three completed national recessions began, as 
determined by the National Bureau of Economic Research, and ending with 
the calendar year for which the AHCR is being calculated.
    (2) For each calendar year during the selected time period, 
calculate the benefit-cost ratio, as defined in Sec.606.3; and
    (3) Average the three highest calendar year benefit cost ratios for 
the selected time period from paragraph (2) of this definition. Final 
calculations are rounded to the nearest multiple of 0.01 percent.
    Benefit-cost ratio for a calendar year is the percentage obtained by 
dividing--
    (1) The total dollar sum of--
    (i) All compensation actually paid under the State law during such 
calendar year, including in such total sum all regular, additional, and 
extended compensation, as defined in section 205 of the Federal-State 
Extended Unemployment Compensation Act of 1970, and excluding from such 
total sum--
    (A) Any such compensation paid for which the State is entitled to 
reimbursement or was reimbursed under the provisions of any Federal Law, 
and
    (B) Any such compensation paid which is attributable to services 
performed for a reimbursing employer, and which is not included in the 
total dollar amount reported under paragraph (c)(1)(i)(A) of this 
section, and
    (ii) Any interest paid during such calendar year on any advance, by
    (2) The total wages (as defined in Sec.606.3) with respect to such 
calendar year.
    (3) For cap purposes, if any percentage determined by this 
computation for a calendar year is not a multiple of 0.1 percent, such 
percentage shall be reduced to the nearest multiple of 0.1 percent. For 
funding goal purposes, if any percentage determined by this computation 
for a calendar year is not a multiple of 0.01 percent, such percentage 
is rounded to the nearest multiple of 0.01 percent.
    Contributions means payments required by a State law to be made into 
an unemployment fund by any person on account of having individuals in 
his employ, to the extent that such payments are made by him without 
being deducted or deductible from the remuneration of individuals in his 
employ.
    Federal unemployment tax means the excise tax imposed under section 
3301 of the Federal Unemployment Tax Act on employers with respect to 
having individuals in their employ.
    Fiscal year means the Federal fiscal year which begins on October 1 
of a year and ends on September 30, of the next succeeding year.
    FUTA refers to the Federal Unemployment Tax Act.
    Reserve ratio is calculated by dividing the balance in the State's 
account in

[[Page 40]]

the unemployment trust fund (UTF) as of December 31 of such year by the 
total wages paid workers covered by the unemployment compensation (UC) 
program during the 12 months ending on December 31 of such year. Final 
calculations are rounded to the nearest multiple of 0.01 percent.
    State unemployment fund or unemployment fund means a special fund 
established under a State law for the payment of unemployment 
compensation to unemployed individuals, and which is an ``unemployment 
fund'' as defined in section 3306(f) of the Federal Unemployment Tax 
Act.
    Taxable year means the calendar year.
    Unemployment tax rate means, for any taxable year and with respect 
to any State, the percentage obtained by dividing the total amount of 
contributions paid into the State unemployment fund with respect to such 
taxable year by total wages as defined in Sec.606.3.
    Wages, taxable means the total sum of remuneration which is subject 
to contributions under a State law.
    Wages, total means the total sum of all remuneration covered by a 
State law, disregarding any dollar limitation on the amount of 
remuneration which is subject to contributions under the State law.

[53 FR 37429, Sept. 26, 1988, as amended at 71 FR 35513, June 21, 2006; 
75 FR 57156, Sept. 17, 2010]



Sec.606.4  Redelegation of authority.

    (a) Redelegation to OWS Administrator. The Administrator, Office of 
Workforce Security (hereinafter ``OWS Administrator''), is redelegated 
authority to make the determinations required under this part. This 
redelegation is contained in Employment and Training Order No. 1-84, 
published in the Federal Register on November 14, 1983 (48 FR 51870).
    (b) Delegation by Governor. The Governor of a State, as used in this 
part, refers to the highest executive official of a State. Wherever in 
this part an action is required by or of the Governor of a State, such 
action may be taken by the Governor or may be taken by a delegatee of 
the Governor if the Department is furnished appropriate proof of an 
authoritative delegation of authority.

[53 FR 37429, Sept. 26, 1988, as amended at 71 FR 35514, June 21, 2006]



Sec.606.5  Verification of estimates and review of determinations.

    The Department of Labor (hereinafter ``Department'') shall verify 
all information and data provided by a State under this part, and the 
State shall comply with such provisions as the Department considers 
necessary to assure the correctness and verification of such information 
and data. The State agency of a State affected by a determination made 
by the OWS Administrator under this part may seek review of such 
determination by a higher level official of the Employment and Training 
Administration.



Sec.606.6  Information, reports, and studies.

    A State shall furnish to the Secretary of Labor such information and 
reports and conduct such studies as the Secretary determines are 
necessary or appropriate for carrying out the purposes of this part, 
including any additional information or data the OWS Administrator may 
require for the purposes of making determinations under subparts C and E 
of this part.

[53 FR 37429, Sept. 26, 1988, as amended at 71 FR 35514, June 21, 2006]

Subpart B--Tax Credit Reduction [Reserved]



               Subpart C_Relief From Tax Credit Reduction



Sec.606.20  Cap on tax credit reduction.

    (a) Applicability. Subsection (f) of section 3302 of FUTA authorizes 
a limitation (cap) on the reduction of tax credits by reason of an 
outstanding balance of advances, if the OWS Administrator determines 
with respect to a State, on or before November 10 of a taxable year, 
that--
    (1) No action was taken by the State during the 12-month period 
ending on September 30 of such taxable year which has resulted, or will 
result, in a reduction in the State's unemployment tax effort, as 
defined in Sec.606.21(a);

[[Page 41]]

    (2) No action was taken by the State during the 12-month period 
ending on September 30 of such taxable year which has resulted, or will 
result, in a net decrease in the solvency of the State unemployment 
compensation system, as defined in Sec.606.21(b);
    (3) The State unemployment tax rate (as defined in Sec.606.3) for 
the taxable year equals or exceeds the average benefit-cost ratio (as 
defined in Sec.606.3) for the calendar years in the five-calendar year 
period ending with the calendar year immediately preceding the taxable 
year for which the cap is requested, under the rules specified in Sec.
606.21 (c) and (d); and
    (4) The outstanding balance of advances to the State on September 30 
of the taxable year was not greater than the outstanding balance of 
advances to the State on September 30 of the third preceding taxable 
year.
    (b) Maximum tax credit reduction. If a State qualifies for a cap, 
the maximum tax credit reduction for the taxable year shall not exceed 
0.6 percent, or, if higher, the tax credit reduction that was in effect 
for the taxable year preceding the taxable year for which the cap is 
requested.
    (c) Year not taken into account. If a State qualifies for a cap for 
any year, the year and January 1 of the year to which the cap applies 
will not be taken into account for purposes of determining reduction of 
tax credit for subsequent taxable years.
    (d) Partial caps. Partial caps obtained under subsection (f)(8) are 
no longer available. Nevertheless, for the purposes of applying section 
3302(c)(2) to subsequent taxable years, partial cap credits earned will 
be taken into account for purposes of determining reduction of tax 
credits. Also, the taxable year to which the partial cap applied (and 
January 1 thereof) will be taken into account for purposes of 
determining reduction of tax credits for subsequent taxable years.

[53 FR 37429, Sept. 26, 1988, as amended at 75 FR 57156, Sept. 17, 2010]



Sec.606.21  Criteria for cap.

    (a) Reduction in unemployment tax effort. (1) For purposes of 
paragraph (a)(1) of Sec.606.20, a reduction in a State's unemployment 
tax effort will have occurred with respect to a taxable year if any 
action is or was taken (legislative, judicial, or administrative,) that 
is effective during the 12-month period ending on September 30 of such 
taxable year, which has resulted in or will result in a reduction of the 
amount of contributions paid or payable or the amounts that were or 
would have been paid or payable but for such action.
    (2) Actions that will result in a reduction in tax effort include, 
but are not limited to, a reduction in the taxable wage base, the tax 
rate schedule, tax rates, or taxes payable (including surtaxes) that 
would not have gone into effect but for the legislative, judicial, or 
administrative action taken. Notwithstanding the foregoing criterion, a 
reduction in unemployment tax effort resulting from any provision of the 
State law enacted prior to August 13, 1981, will not be taken into 
account as a reduction in the State's unemployment tax effort for the 
purposes of this section.
    (b) Net decrease in solvency. For purposes of paragraph (a)(2) of 
Sec.606.20, a net decrease in the solvency of the State's unemployment 
compensation system will have occurred with respect to a taxable year if 
any action is or was taken (legislative, judicial, or administrative), 
that is effective during the 12-month period ending on September 30 of 
such taxable year, which has resulted in or will result in an increase 
in benefits without at least an equal increase in taxes, or a decrease 
in taxes without at least an equal decrease in benefits. Notwithstanding 
the foregoing criterion, a decrease in solvency resulting from any 
provision of the State law enacted prior to August 13, 1981, will not be 
taken into account as a reduction in solvency of the State's 
unemployment compensation system for the purposes of this section.
    (c) State unemployment tax rate. For purposes of paragraph (a)(3) of 
Sec.606.20, the State unemployment tax rate is defined in Sec.606.3. 
If such percentage is not a multiple of 0.1 percent, the percentage 
shall remain unrounded.
    (d) State five-year average benefit cost ratio. The average benefit-
cost ratio for the 5 preceding calendar years is the percentage 
determined by dividing the sum of the benefit-cost ratios for the 5

[[Page 42]]

years by five. If such percentage is not a multiple of 0.1 percent, the 
percentage shall remain unrounded.

[53 FR 37429, Sept. 26, 1988, as amended at 75 FR 57156, Sept. 17, 2010]



Sec.606.22  Application for cap.

    (a) Application. (1) The Governor of the State shall make 
application, addressed to the Secretary of Labor, no later than July 1 
of a taxable year with respect to which a State requests a cap on tax 
credit reduction. The Governor is required to notify the Department on 
or before October 15 of such taxable year of any action occurring after 
the date of the initial application and effective prior to October 1 of 
such year that would impact upon the State's application.
    (2) The OWS Administrator will make a determination on the 
application on or before November 10 of such taxable year, will notify 
the applicant and the Secretary of the Treasury of such determination, 
and will cause notice of such determination to be published in the 
Federal Register.
    (b) Anticipated impact statement. In support of the application by 
the Governor, there shall be submitted with the application (on or 
before October 15), for the purposes of the criteria described in 
Sec. Sec.606.20(a) (1) and (2) and 606.21 (a) and (b), a description 
of all statutory provisions enacted or amended, regulations adopted or 
revised, administrative policies and procedures adopted or revised, and 
judicial decisions given effect, which are effective during the 12-month 
period ending on September 30 of the taxable year for which a cap on tax 
credit reduction is requested, and an anticipated impact statement (AIS) 
for each such program action in the following respect--
    (1) The estimated dollar effect on each program action upon 
expenditures for compensation from the State unemployment fund and for 
the amounts of contributions paid or payable in such 12-month period, 
including the effect of interaction among program actions, and with 
respect to program actions for which dollar impact cannot be estimated 
or is minor or negligible, indicate whether the impact is positive or 
negative;
    (2) If a program action has no such dollar effect, an explanation of 
why there is or will be no such effect;
    (3) A description of assumptions and methodology used and the basis 
for the financial estimate of the impact of each program action 
described in paragraphs (b)(1) and (b)(2) of this section; and
    (4) A comparision of the program actions described in paragraphs 
(b)(1) and (b)(2) of this section with the program actions prior to the 
Federal fiscal year (as defined in Sec.606.3) which ends on such 
September 30.
    (c) Unemployment tax rate. With respect to the unemployment tax rate 
criterion described in Sec. Sec.606.20(a)(3) and 606.21(c), the 
application shall include an estimate for the taxable year with respect 
to which a cap on tax credit reduction is requested and actual data for 
the prior two years as follows:
    (1) The amount of taxable wages as defined in Sec.606.3;
    (2) The amount of total wages as defined in Sec.606.3; and
    (3) The estimated distribution of taxable wages, as defined in Sec.
606.3, by tax rate under the State law.
    (d) Benefit cost ratio. With respect to the benefit cost ratio 
criterion described in Sec. Sec.606.20(a)(3) and 606.21(d), the 
application shall include for each of the five calendar years prior to 
the taxable year for which a cap on tax credit reduction is requested, 
the following data:
    (1) The total dollar sum of compensation actually paid under the 
State law during the calendar year, including in such total sum all 
regular, additional, and extended compensation as defined in section 205 
of the Federal-State Extended Unemployment Compensation Act of 1970, but 
excluding from such total sum--
    (i) The total dollar amount of such compensation paid for which the 
State is entitled to reimbursement or was reimbursed under the 
provisions of any Federal law;
    (ii) The total dollar amount of such compensation paid which is 
attributable to services performed for a reimbursing employer, and which 
is not included in the total amount reported under paragraph (d)(1)(i) 
of this section;

[[Page 43]]

    (2) The total dollar amount of interest paid during the calendar 
year on any advance; and
    (3) The total dollar amount of wages (as defined in Sec.606.3) 
with respect to such calendar year.
    (e) Documentation required. Copies of the sources of or authority 
for each program action described in paragraph (b) of this section shall 
be submitted with each application for a cap on tax credit reduction. In 
addition, a notation shall be made on each AIS of where all figures 
referred to are contained in reports required by the Department or in 
other data sources.
    (f) State contact person. The Department may request additional 
information or clarification of information submitted bearing upon an 
application for a cap on tax credit reduction. To expedite requests for 
such information, the name and telephone number of an appropriate State 
official shall be included in the application by the Governor.

[53 FR 37429, Sept. 26, 1988, as amended at 75 FR 57156, Sept. 17, 2010]



Sec.606.23  Avoidance of tax credit reduction.

    (a) Applicability. Subsection (g) of section 3302 of FUTA authorizes 
a State to avoid a tax credit reduction for a taxable year by meeting 
the three requirements of subsection (g). These requirements are met if 
the OWS Administrator determines that:
    (1) Advances were repaid by the State during the one-year period 
ending on November 9 of the taxable year in an amount not less than the 
sum of--
    (i) The potential additional taxes (as estimated by the OWS 
Administrator) that would be payable by the State's employers if 
paragraph (2) of section 3302(c) of FUTA were applied for such taxable 
year (as estimated with regard to the cap on tax credit reduction for 
which the State qualifies under Sec. Sec.606.20 to 606.22 with respect 
to such taxable year), and
    (ii) Any advances made to such State during such one-year period 
under title XII of the Social Security Act;
    (2) There will be adequate funds in the State unemployment fund (as 
estimated by the OWS Administrator) sufficient to pay all benefits when 
due and payable under the State law during the three-month period 
beginning on November 1 of such taxable year without receiving any 
advance under title XII of the Social Security Act; and
    (3) There is a net increase (as estimated by the OWS Administrator) 
in the solvency of the State unemployment compensation system for the 
taxable year and such net increase equals or exceeds the potential 
additional taxes for such taxable year as estimated under paragraph 
(a)(1)(i) of this section.
    (b) Net increase in solvency. (1) The net increase in solvency for a 
taxable year, as determined for the purposes of paragraph (a)(3) of this 
section, must be attributable to legislative changes made in the State 
law after the later of--
    (i) September 3, 1982, or
    (ii) The date on which the first advance is taken into account in 
determining the amount of the potential additional taxes.
    (2) The OWS Administrator shall determine the net increase in 
solvency by first estimating the difference between revenue receipts and 
benefit outlays under the law in effect for the year for which avoidance 
is requested, as if the relevant changes in State law referred to in 
paragraph (b)(1) of this section were not in effect for such year. The 
OWS Administrator shall then estimate the difference between revenue 
receipts and benefit outlays under the law in effect for the year for 
which the avoidance is requested, taking into account the relevant 
changes in State law referred to in paragraph (b)(1) of this section. 
The amount (if any) by which the second estimated difference exceeds the 
first estimated difference shall constitute the net increase in solvency 
for the purposes of this section.
    (c) Year taken into account. If a State qualifies for avoidance for 
any year, that year and January 1 of that year to which the avoidance 
applies will be taken into account for purposes of determining reduction 
of tax credits for subsequent taxable years.



Sec.606.24  Application for avoidance.

    (a) Application. (1) The Governor of the State shall make 
application, addressed to the Secretary of Labor, no later than July 1 
of a taxable year with

[[Page 44]]

respect to which a State requests avoidance of tax credit reduction. The 
Governor is required to notify the Department on or before October 15 of 
such taxable year of any action impacting upon the State's application 
occurring subsequent to the date of the initial application and on or 
before November 10.
    (2) The OWS Administrator will make a determination on the 
application as of November 10 of such taxable year, will notify the 
applicant and the Secretary of the Treasury of such determination, and 
will cause notice of such determination to be published in the Federal 
Register.
    (b) Information. (1) The application shall include a statement of 
the amount of advances repaid and to be repaid during the one-year 
period ending on November 9 of the taxable year for which avoidance is 
requested. If the amount repaid as of the date of the application is 
less than the amount required to satisfy the provisions of Sec.
606.23(a)(1), the Governor shall provide a report later of the 
additional repayments that have been made in the remainder of the one-
year period ending on November 9 of the taxable year, for the purposes 
of meeting the provisions of Sec.606.23(a)(1).
    (2) The application also shall include estimates of revenue 
receipts, benefit outlays, and end-of-month fund balance for each month 
in the period beginning with September of the taxable year for which 
avoidance is requested through the subsequent January. Actual data for 
the comparable period of the preceding year also shall be included in 
the application in order to determine the reasonableness of such 
estimates.
    (3) The application also shall include a description of State law 
changes, effective for the taxable year for which the avoidance is 
requested, which resulted in a net increase in the solvency of the State 
unemployment compensation system, and documentation which supports the 
State's estimate of the net increase in solvency for such taxable year.



Sec.606.25  Waiver of and substitution for additional tax credit reduction.

    A provision of subsection (c)(2) of section 3302 of FUTA provides 
that, for a State that qualifies, the additional tax credit reduction 
applicable under subparagraph (C), beginning in the fifth consecutive 
year of a balance of outstanding advances, shall be waived and the 
additional tax credit reduction applicable under subparagraph (B) shall 
be substituted. The waiver and substitution are granted if the OWS 
Administrator determines that the State has taken no action, effective 
during the 12-month period ending on September 30 of the year for which 
the waiver and substitution are requested, which has resulted or will 
result in a net decrease in the solvency of the State unemployment 
compensation system as determined for the purposes of Sec. Sec.
606.20(a)(2) and 606.21(b).



Sec.606.26  Application for waiver and substitution.

    (a) Application. The Governor of the State shall make application 
addressed to the Secretary of Labor, no later than July 1 of a taxable 
year with respect to which a State requests waiver and substitution. Any 
such application shall contain the supportive data and information 
required by Sec.606.22(b) for the purposes of Sec. Sec.606.20(a)(2) 
and 606.21(b). The Governor is required to notify the Department on or 
before October 15 of such taxable year of action occurring after the 
date of the initial application and effective prior to October 1 of such 
year that would impact upon the State's application.
    (b) Notification of determination. The OWS Administrator will make a 
determination on the application as of November 10 of the taxable year, 
will notify the applicant and the Secretary of the Treasury of the 
resulting tax credit reduction to be applied, and will cause notice of 
such determination to be published in the Federal Register.



                     Subpart D_Interest on Advances



Sec.606.30  Interest rates on advances.

    Advances made to States pursuant to title XII of the Social Security 
Act shall be subject to interest payable on the due dates specified in 
Sec.606.31. \1\ The interest rate for each calendar year

[[Page 45]]

will be 10 percent or, if less, the rate determined by the Secretary of 
the Treasury and announced to the States by the Department.
---------------------------------------------------------------------------

    \1\ (Editorial note: This section will be added at a later date.)

[53 FR 37429, Sept. 26, 1988, as amended at 71 FR 35514, June 21, 2006]



Sec.606.31  Due dates for payment of interest. [Reserved]



Sec.606.32  Types of advances subject to interest.

    (a) Payment of interest. Except as otherwise provided in paragraph 
(b) of this section each State shall pay interest on any advance made to 
such State under title XII of the Social Security Act.
    (b) Cash flow loans--(1) Availability of interest-free advances. 
Advances are deemed cash flow loans and shall be free of interest 
provided that:
    (i) The advances are repaid in full prior to October 1 of the 
calendar year in which the advances are made;
    (ii) The State does not receive an additional advance after 
September 30 of the same calendar year in which the advance is made. If 
the State receives an additional advance after September 30 of the same 
calendar year in which earlier advances were made, interest on the fully 
repaid earlier advance(s) is due and payable not later than the day 
following the date of the first such additional advance. The 
administrator of the State agency must notify the Secretary of Labor no 
later than September 10 of the same calendar year of those loans deemed 
to be cash flow loans and not subject to interest. This notification 
must include the date and amount of each loan made beginning January 01 
through September 30 of the same calendar year, and a copy of 
documentation sent to the Secretary of the Treasury requesting loan 
repayment transfer(s) from the State's account in the UTF to the Federal 
unemployment account in the UTF; and
    (iii) The State has met the funding goals described in paragraph 
(b)(2) or (b)(3) of this section.
    (2) Funding goals. This paragraph (b)(2) is applicable to all States 
as of January 1, 2019. A State has met the funding goals requirement if:
    (i) The State, as of December 31 of any of the 5 consecutive 
calendar years preceding the calendar year in which such advances are 
made, had an AHCM of at least 1.00, as determined under Sec.606.3; and
    (ii) The State maintained tax effort as determined under paragraph 
(b)(4) of this section.
    (3) Phasing in funding goals. This paragraph (b)(3) applies for 
calendar years 2014 through 2018. A State has met the funding goals 
requirement if it has satisfied the solvency criterion in paragraph (i), 
and the maintenance of tax effort criteria in paragraph (ii), of this 
Sec.606.32(b)(3).
    (i) A State has met the solvency criterion if:
    (A) For calendar year 2014, as of December 31 of any of the 5 
consecutively preceding calendar years, the State had an AHCM of at 
least 0.50, as determined under Sec.606.3;
    (B) For calendar year 2015, as of December 31 of any of the 5 
consecutively preceding calendar years, the State had an AHCM of at 
least 0.60, as determined under Sec.606.3;
    (C) For calendar year 2016, as of December 31 of any of the 5 
consecutively preceding calendar years, the State had an AHCM of at 
least 0.70, as determined under Sec.606.3;
    (D) For calendar year 2017, as of December 31 of any of the 5 
consecutively preceding calendar years, the State had an AHCM of at 
least 0.80, as determined under Sec.606.3;
    (E) For calendar year 2018, as of December 31 of any of the 5 
consecutively preceding calendar years, the State had an AHCM of at 
least 0.90, as determined under Sec.606.3;
    (ii) A State has met the maintenance of tax effort criteria if it 
maintained tax effort as determined under paragraph (b)(4) of this 
section.
    (4) Maintenance of tax effort criteria. A State has maintained tax 
effort if, for every year between the last calendar year in which it met 
the solvency criterion in paragraph (b)(2)(i) or (b)(3)(i) of this 
section and the calendar year in which an interest-free advance is 
taken, the State's unemployment tax rate as defined in Sec.606.3 for 
the calendar year is at least--
    (i) 80 percent of the prior year's unemployment tax rate; and

[[Page 46]]

    (ii) 75 percent of the State 5-year average benefit-cost ratio, as 
determined under Sec.606.21(d).

[53 FR 37429, Sept. 26, 1988, as amended at 75 FR 57156, Sept. 17, 2010]



Sec.606.33  No payment of interest from unemployment fund. [Reserved]



Sec.606.34  Reports of interest payable. [Reserved]



Sec.606.35  Order of application for repayments. [Reserved]



                 Subpart E_Relief from Interest Payment



Sec.606.40  May/September delay.

    Subsection (b)(3)(B) of section 1202 of the Social Security Act 
permits a State to delay payment of interest accrued on advances made 
during the last five months of the Federal fiscal year (May, June, July, 
August, and September) to no later than December 31 of the next 
succeeding calendar year. If the payment is delayed, interest on the 
delayed payment will accrue from the normal due date (i.e., September 
30) and in the same manner as if the interest due on the advance(s) was 
an advance made on such due date. The Governor of a State which has 
decided to delay such interest payment shall notify the Secretary of 
Labor no later than September 1 of the year with respect to which the 
delay is applicable.



Sec.606.41  High unemployment deferral.

    (a) Applicability. Subsection (b)(3)(C) of section 1202 of the 
Social Security Act permits a State to defer payment of, and extend the 
payment for, 75 percent of interest charges otherwise due prior to 
October 1 of a year if the OWS Administrator determines that high 
unemployment conditions existed in the State.
    (b) High unemployment defined. For purposes of this section, high 
unemployment conditions existed in the State if the State's rate of 
insured unemployment (as determined for purposes of 20 CFR 615.12) under 
the State law with respect to the period consisting of the first six 
months of the preceding calendar year equalled or exceeded 7.5 percent; 
this means that in weeks 1 (that week which includes January 1 of the 
year) through 26 of such preceding calendar year, the rate of insured 
unemployment reported by the State and accepted by the Department under 
20 CFR part 615 must have averaged a percentage equalling or exceeding 
7.5 percent.
    (c) Schedule of deferred payments. The State must pay prior to 
October 1 one-fourth of the interest due, and must pay a minimum of one-
third of the deferred amount prior to October 1 in each of the three 
years following the year in which deferral was granted; at the State's 
option payment of deferred interest may be accelerated.
    (d) Related criteria. Timely payment of one-fourth of the interest 
due prior to October 1 is a precondition to obtaining deferral of 
payment of 75 percent of the interest due. No interest shall accrue on 
such deferred interest.
    (e) Application for deferral and determination. (1) The Governor of 
a State which has decided to request such deferral of interest payment 
shall apply to the Secretary of Labor no later than July 1 of the 
taxable year for which the deferral is requested.
    (2) The OWS Administrator will determine whether deferral is or is 
not granted on the basis of the Department's records of reports of the 
rates of insured unemployment and information obtained from the 
Department of the Treasury as to the timely and full payment of one-
fourth of the interest due.



Sec.606.42  High unemployment delay.

    (a) Applicability. Paragraph (9) of section 1202 (b) of the Social 
Security Act permits a State to delay for a period not exceeding nine 
months the interest payment due prior to October 1 if, for the most 
recent 12-month period prior to such October 1 for which data are 
available, the State had an average total unemployment rate of 13.5 
percent or greater.
    (b) Delayed due date. An interest payment delayed under paragraph 
(9) must be paid in full not later than the last official Federal 
business day prior to the following July 1; at the State's option 
payment of delayed interest may be accelerated. No interest shall accrue 
on such delayed payment.

[[Page 47]]

    (c) Application for delay in payment and determination. (1) The 
Governor of a State which has decided to request delay in payment of 
interest under paragraph (9) shall apply to the Secretary of Labor no 
later than July 1 of the taxable year for which the delay is requested.
    (2) The OWS Administrator will determine whether delay is or is not 
granted on the basis of seasonally unadjusted civilian total 
unemployment rate data published by the Department's Bureau of Labor 
Statistics.



Sec.606.44  Notification of determinations.

    The OWS Administrator will make determinations under Sec. Sec.
606.41, 606.42, and 606.43 on or before September 10 of the taxable 
year, will promptly notify the applicants and the Secretary of the 
Treasury of such determinations, and will cause notice of such 
determinations to be published in the Federal Register. The OWS 
Administrator also will inform the Secretary of the Treasury and cause 
notice to be published in the Federal Register of information with 
respect to delayed payment of interest as provided in Sec.606.40.



PART 609_UNEMPLOYMENT COMPENSATION FOR FEDERAL CIVILIAN EMPLOYEES
--Table of Contents



                      Subpart A_General Provisions

Sec.
609.1 Purpose and application.
609.2 Definitions of terms.

                Subpart B_Administration of UCFE Program

609.3 Eligibility requirements for UCFE.
609.4 Weekly and maximum benefit amounts.
609.5 Claims for UCFE.
609.6 Determinations of entitlement; notices to individual.
609.7 Appeal and review.
609.8 The applicable State for an individual.
609.9 Provisions of State law applicable to UCFE claims.
609.10 Restrictions on entitlement.
609.11 Overpayments; penalties for fraud.
609.12 Inviolate rights to UCFE.
609.13 Recordkeeping; disclosure of information.
609.14 Payments to States.
609.15 Public access to Agreements.
609.16 Administration in absence of an Agreement.
609.17 Information, reports, and studies.

             Subpart C_Responsibilities of Federal Agencies

609.20 Information to Federal civilian employees.
609.21 Findings of Federal agency.
609.22 Correcting Federal findings.
609.23 Furnishing additional information.
609.24 Reconsideration of Federal findings.
609.25 Furnishing other information.
609.26 Liaison with Department.

    Authority: 5 U.S.C. 8508; Secretary's Order No. 4-75, 40 FR 18515; 
(5 U.S.C. 301). Interpret and apply secs. 8501-8508 of title 5, United 
States Code.

    Source: 47 FR 54687, Dec. 3, 1982, unless otherwise noted.



                      Subpart A_General Provisions



Sec.609.1  Purpose and application.

    (a) Purpose. Subchapter I of chapter 85, title 5 of the United 
States Code, as amended by Pub. L. 94-566, 90 Stat. 2667, 5 U.S.C. 8501-
8508, provides for a permanent program of unemployment compensation for 
unemployed Federal civilian employees. The unemployment compensation 
provided for in subchapter I is hereinafter referred to as unemployment 
compensation for Federal employees, or UCFE. The regulations in this 
part are issued to implement the UCFE Program.
    (b) First rule of construction. The Act and the implementing 
regulations in this part shall be construed liberally so as to carry out 
the purposes of the Act.
    (c) Second rule of construction. The Act and the implementing 
regulations in this part shall be construed so as to assure insofar as 
possible the uniform interpretation and application of the Act 
throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor (hereafter Department), 
not later than 10 days after issuance, a copy of each judicial or 
administrative decision ruling on an individual's entitlement to payment 
of UCFE or to credit for a waiting period. On request of the Department, 
a State agency shall forward to the Department a copy of any 
determination or redetermination ruling on

[[Page 48]]

an individual's entitlement to UCFE or waiting period credit.
    (2) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part, the Department may at any time 
notify the State agency of the Department's view. Thereafter the State 
agency shall issue a redetermination or appeal if possible, and shall 
not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part, the Department may at any time notify the State agency 
of the Department's view. If the determination, redetermination, or 
decision in question denies UCFE to a claimant, the steps outlined in 
paragraph (d)(2) of this section shall be followed by the State agency. 
If the determination, redetermination, or decision in question awards 
UCFE to a claimant, the benefits are ``due'' within the meaning of 
section 303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1), and 
therefore must be paid promptly to the claimant. However, the State 
agency shall take the steps outlined in paragraph (d)(2) of this 
section, and payments to the claimant may be temporarily delayed if 
redetermination or appeal action is taken not more than one business day 
following the day on which the first payment otherwise would be issued 
to the claimant; and the redetermination action is taken or appeal is 
filed to obtain a reversal of the award of UCFE and a ruling consistent 
with the Department's view; and the redetermination action or appeal 
seeks an expedited redetermination or appeal within not more than two 
weeks after the redetermination action is taken or the appeal is filed. 
If redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding UCFE or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the claimant.
    (4)(i) If any determination, redetermination, or decision, referred 
to in paragraph (d)(2) or paragraph (d)(3) of this section, is treated 
as a precedent for any future UCFE claim or claim under the UCX Program 
(part 614 of this chapter), the Secretary will decide whether the 
Agreement with the State entered into under the Act shall be terminated.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part, including any 
determination, redetermination, or decision referred to in paragraph 
(d)(3) of this section, the Secretary will decide whether the State 
shall be required to restore the funds of the United States for any sums 
paid under such a determination, redetermination, or decision, and 
whether, in the absence of such restoration, the Agreement with the 
State shall be terminated and whether other action shall be taken to 
recover such sums for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (d)(2) of paragraph (d)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.



Sec.609.2  Definitions of terms.

    For the purposes of the Act and this part:
    (a) Act means subchapter I of chapter 85, title 5, United States 
Code, 5 U.S.C. 8501-8508.

[[Page 49]]

    (b) Agreement means the agreement entered into pursuant to the Act 
between a State and the Secretary under which the State agency of the 
State agrees to make payments of unemployment compensation in accordance 
with the Act and the regulations and procedures thereunder prescribed by 
the Department.
    (c) Based period means the base period as defined by the applicable 
State law for the benefit year.
    (d) Benefit year means the benefit year as defined by the applicable 
State law, and if not so defined the term means the period prescribed in 
the agreement with the State or, in the absence of an Agreement, the 
period prescribed by the Department.
    (e) Federal agency means any department, agency, or governmental 
body of the United States, including any instrumentality wholly or 
partially owned by the United States, in any branch of the Government of 
the United States, which employs any individual in Federal civilian 
service.
    (f) Federal civilian service means service performed in the employ 
of any Federal agency, except service performed--
    (1) By an elective official in the executive or legislative branches 
of the Government of the United States;
    (2) As a member of the Armed Forces or the Commissioned Corps of the 
National Oceanic and Atmospheric Administration;
    (3) By Foreign Service personnel for whom special separation 
allowances are provided under chapter 14 of title 22 of the United 
States Code;
    (4) Outside the 50 States, the Commonwealth of Puerto Rico, the 
Virgin Islands, and the District of Columbia, by an individual who is 
not a citizen of the United States;
    (5) By an individual excluded by regulations of the Office of 
Personnel Management from civil service retirement coverage provided by 
subchapter III of chapter 83 of title 5 of the United States Code 
because the individual is paid on a contract or fee basis;
    (6) By an individual receiving nominal pay and allowances of $12 or 
less a year;
    (7) In a hospital, home, or other institution of the United States 
by a patient or inmate thereof;
    (8) By a student-employee as defined by 5 U.S.C. 5351; that is: (i) 
A student nurse, medical or dental intern, resident-in-training, student 
dietitian, student physical therapist, or student occupational 
therapist, assigned or attached to a hospital, clinic, or medical or 
dental laboratory operated by an agency as defined in section 5351; or
    (ii) Any other student-employee, assigned or attached primarily for 
training purposes to such a hospital, clinic, or medical or dental 
laboratory operated by such an agency, who is designated by the head of 
the agency with the approval of the Office of Personnel Management;
    (9) By an individual serving on a temporary basis in case of fire, 
storm, earthquake, flood, or other similar emergency;
    (10) By an individual employed under a Federal relief program to 
relieve the individual from unemployment;
    (11) As a member of a State, county, or community committee under 
the Agricultural Stabilization and Conservation Service or of any other 
board, council, committee, or other similar body, unless such body is 
composed exclusively of individuals otherwise in the full-time employ of 
the United States;
    (12) By an officer or member of the crew on or in connection with an 
American vessel which is:
    (i) Owned by or bareboat chartered to the United States, and
    (ii) The business of which is conducted by a general agent of the 
Secretary of Commerce; and
    (iii) If contributions on account of such service are required under 
section 3305(g) of the Internal Revenue Code of 1986 (26 U.S.C. 3305(g)) 
to be made to an unemployment fund under a State law;
    (13) By an individual excluded by any other Federal law from 
coverage under the UCFE Program; or
    (14) By an individual whose service is covered by the UCX Program to 
which part 614 of this chapter applies.
    (g) Federal employee means an individual who has performed Federal 
civilian service.

[[Page 50]]

    (h) Federal findings means the facts reported by a Federal agency 
pertaining to an individual as to: (1) Whether or not the individual has 
performed Federal civilian service for such an agency;
    (2) The period or periods of such Federal civilian service;
    (3) The individual's Federal wages; and
    (4) The reasons for termination of the individual's Federal civilian 
service.
    (i) Federal wages means all pay and allowances, in cash and in kind, 
for Federal civilian service.
    (j) First claim means an initial claim for unemployment compensation 
under the UCFE Program, the UCX Program (part 614 of this chapter), a 
State law, or some combination thereof, whereby a benefit year is 
established under an applicable State law.
    (k) Official station means the State (or country, if outside the 
United States) designated on a Federal employee's notification of 
personnel action terminating the individual's Federal civilian service 
(Standard Form 50 or its equivalent) as the individual's ``duty 
station.'' If the form of notification does not specify the Federal 
employee's ``duty station'', the individual's official station shall be 
the State or country designated under ``name and location of employing 
office'' on such form or designated as the individual's place of 
employment on an equivalent form.
    (l) Secretary means the Secretary of Labor of the United States.
    (m) State means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.
    (n) State agency means the agency of the State which administers the 
applicable State law and is administering the UCFE Program in the State 
pursuant to an Agreement with the Secretary.
    (o)(1) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1986, 26 U.S.C. 3304, if the State is certified under section 
3304(c) of the Internal Revenue Code of 1986, 26 U.S.C. 3304(c).
    (2) Applicable State law means the State law made applicable to a 
UCFE claimant by Sec.609.8.
    (p)(1) Unemployment compensation means cash benefits (including 
dependents' allowances) payable to individuals with respect to their 
unemployment, and includes regular, additional, emergency, and extended 
compensation.
    (2) Regular compensation means unemployment compensation payable to 
an individual under any State law, but not including additional 
compensation or extended compensation.
    (3) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors.
    (4) Emergency compensation means supplementary unemployment 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Extended compensation means unemployment compensation payable to 
an individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970, as 
amended, 26 U.S.C. 3304 note, and part 615 of this chapter, with respect 
to the payment of extended compensation.
    (q) Week means, for purposes of eligibility for and payment of UCFE, 
a week as defined in the applicable State law.
    (r) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to all employment 
and earnings, and in the same manner and to the same extent for the 
purposes of the UCFE Program, as if the individual filing for UCFE were 
filing a claim for State unemployment compensation.

[47 FR 54687, Dec. 3, 1982, as amended at 71 FR 35514, June 21, 2006]

[[Page 51]]



                Subpart B_Administration of UCFE Program



Sec.609.3  Eligibility requirements for UCFE.

    An individual shall be eligible to receive a payment of UCFE or to 
waiting period credit with respect to a week of unemployment if:
    (a) The individual has Federal civilian service and Federal wages in 
the base period under the applicable State law;
    (b) The individual meets the qualifying employment and wage 
requirements of the applicable State law, either on the basis of Federal 
civilian service and Federal wages alone or in combination with service 
and wages covered under a State law or under the UCX Program (part 614 
of this chapter);
    (c) The individual has filed an initial claim for UCFE and, as 
appropriate, has filed a timely claim for waiting period credit or a 
payment of UCFE with respect to that week of unemployment; and
    (d) The individual is totally, part-totally, or partially 
unemployed, and is able to work, available for work, and seeking work 
within the meaning of or as required by the applicable State law, and is 
not subject to disqualification under this part or the applicable State 
law, with respect to that week of unemployment.



Sec.609.4  Weekly and maximum benefit amounts.

    (a) Total unemployment. The weekly amount of UCFE payable to an 
eligible individual for a week of total unemployment shall be the amount 
that would be payable to the individual as unemployment compensation for 
a week of total unemployment as determined under the applicable State 
law.
    (b) Partial and part-total unemployment. The weekly amount of UCFE 
payable for a week of partial or part-total unemployment shall be the 
amount that would be payable to the individual as unemployment 
compensation for a week of partial or part-total unemployment as 
determined under the applicable State law.
    (c) Maximum amount. The maximum amount of UCFE which shall be 
payable to an eligible individual during and subsequent to the 
individual's benefit year shall be the maximum amount of all 
unemployment compensation that would be payable to the individual as 
determined under the applicable State law.
    (d) Computation rules. (1) The weekly and maximum amounts of UCFE 
payable to an individual under the UCFE Program shall be determined 
under the applicable State law to be in the same amount, on the same 
terms, and subject to the same conditions as the State unemployment 
compensation which would be payable to the individual under the 
applicable State law if the individual's Federal civilian service and 
Federal wages assigned or transferred under this part to the State had 
been included as employment and wages covered by that State law.
    (2) All Federal civilian service and Federal wages for all Federal 
agencies shall be considered employment with a single employer for 
purposes of the UCFE Program.



Sec.609.5  Claims for UCFE.

    (a) First claims. A first claim for UCFE shall be filed by an 
individual in any State agency of any State (or Canada) according to the 
applicable State law, and on a form prescribed by the Department which 
shall be furnished to the individual by the State agency where the claim 
is filed.
    (b) Weekly claims. Claims for waiting week credit and payments of 
UCFE for weeks of unemployment shall be filed in any State agency (or 
Canada) at the times and in the manner as claims for State unemployment 
compensation are filed under the applicable State law, and on forms 
prescribed by the Department which shall be furnished to the individual 
by the State agency where the claim is filed.
    (c) Secretary's standard. The procedure for reporting and filing 
claims for UCFE and waiting period credit shall be consistent with this 
part 609 and the Secretary's ``Standard for Claim Filing, Claimant 
Reporting, Job Finding and Employment Services'' (Employment Security 
Manual, part V, sections 5000 et seq.).

[[Page 52]]



Sec.609.6  Determinations of entitlement; notices to individual.

    (a) Determination of first claim. The State agency whose State law 
applies to an individual under Sec.609.8 shall, promptly upon the 
filing of a first claim for UCFE, determine whether the individual is 
eligible and whether a disqualification applies, and, if the individual 
is found to be eligible, the individual's benefit year and the weekly 
and maximum amounts of UCFE payable to the individual.
    (b) Determinations of weekly claims. The State agency promptly 
shall, upon the filing of a claim for payment of UCFE or waiting period 
credit with respect to a week, determine whether the individual is 
entitled to a payment of UCFE or waiting period credit with respect to 
such week, and, if entitled, the amount of UCFE or waiting period credit 
to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to State unemployment 
compensation under the applicable State law shall apply to 
determinations pertaining to UCFE.
    (d) Notices to individual. The State agency promptly shall give 
notice in writing to the individual of any determination or 
redetermination of a first claim, and, except as may be authorized under 
paragraph (g) of this section, of any determination or redetermination 
of any weekly claim which denies UCFE or waiting period credit or 
reduces the weekly amount or maximum amount initially determined to be 
payable. Each notice of determination or redetermination shall include 
such information regarding the determination or redetermination and 
notice of right to reconsideration or appeal, or both, as is furnished 
with written notices of determinations and redeterminations with respect 
to claims for State unemployment compensation; and where information 
furnished by a Federal agency was considered in making the 
determination, or redetermination, the notice thereof shall include an 
explanation of the right of the individual to seek additional 
information pursuant to Sec.609.23 and/or a reconsideration of Federal 
findings pursuant to Sec.609.24.
    (e) Obtaining information for claim determinations. (1) Information 
required for the determination of claims for UCFE shall be obtained by 
the State agency from claimants, employers, and others, in the same 
manner as information is obtained for claim purposes under the 
applicable State law, but information (including additional and 
reconsidered Federal findings) shall be obtained from the Federal agency 
that employed the UCFE claimant as prescribed in Sec. Sec.609.21 
through 609.25. On request by a UCFE claimant, the State agency shall 
seek additional information pursuant to Sec.609.23 and reconsideration 
of Federal findings pursuant to Sec.609.24.
    (2) If Federal findings have not been received from a Federal agency 
within 12 days after the request for information was submitted to the 
Federal agency, the State agency shall determine the individual's 
entitlement to UCFE on the basis of an affidavit completed by the 
individual on a form prescribed by the Department. In addition, the 
individual shall submit for examination by the State agency any 
documents issued by the Federal agency (for example, Standard Form 50 or 
W-2) verifying that the individual performed services for and received 
wages from such Federal agency.
    (3) If Federal findings received by a State agency after a 
determination has been made under this section contain information which 
would result in a change in the individual's eligibility for or 
entitlement to UCFE, the State agency promptly shall make a 
redetermination and notify the individual, as provided in this section. 
All payments of UCFE made prior to or after such redetermination shall 
be adjusted in accordance therewith.
    (f) Promptness. Full payment of UCFE when due shall be consistent 
with this part 609 and shall be made with the greatest promptness that 
is administratively feasible, but the provisions of part 640 of this 
chapter (relating to promptness of benefit payments) shall not be 
applicable to the UCFE Program.
    (g) Secretary's standard. The procedures for making determinations 
and

[[Page 53]]

redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for UCFE, 
shall be consistent with this part 609 and with the Secretary's 
``Standard for Claim Determinations--Separation Information'' 
(Employment Security Manual, part V, sections 6010 et seq.).

[47 FR 54687, Dec. 3, 1982, as amended at 71 FR 35514, June 21, 2006]



Sec.609.7  Appeal and review.

    (a) Applicable State law. The provisions of the applicable State law 
concerning the right of appeal and fair hearing from a determination or 
redetermination of entitlement to State unemployment compensation shall 
apply to determinations and redeterminations of eligibility for or 
entitlement to UCFE and waiting period credit. Any such determination or 
redetermination shall be subject to appeal and review only in the manner 
and to the extent provided in the applicable State law with respect to 
determinations and redeterminations of entitlement to State unemployment 
compensation.
    (b) Rights of appeal and fair hearing. The provisions on right to 
appeal and opportunity for a fair hearing with respect to claims for 
UCFE shall be consistent with this part and with sections 303(a)(1) and 
303(a)(3) of the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (c) Promptness on appeals. (1) Decisions on appeals under the UCFE 
Program shall accord with the Secretary's ``Standard for Appeals 
Promptness--Unemployment Compensation'' in part 650 of this chapter, and 
with Sec.609.1(d).
    (2) Any provision of an applicable State law for advancement or 
priority of unemployment compensation cases on judicial calendars, or 
otherwise intended to provide for the prompt payment of unemployment 
compensation when due, shall apply to proceedings involving claims for 
UCFE.
    (d) Appeal and review by Federal agency. If a Federal agency 
believes that a State agency's determination or redetermination of an 
individual's eligibility for or entitlement to UCFE is incorrect, the 
Federal agency may seek appeal and review of such determination or 
redetermination in the same manner as an interested employer may seek 
appeal and review under the applicable State law.

[47 FR 54687, Dec. 3, 1982, as amended at 71 FR 35514, June 21, 2006]



Sec.609.8  The applicable State for an individual.

    (a) The applicable State. The applicable State for an individual 
shall be the State to which the individual's Federal civilian service 
and Federal wages are assigned or transferred under this section. The 
applicable State law for the individual shall be the State law of such 
State.
    (b) Assignment of service and wages. (1) An individual's Federal 
civilian service and Federal wages shall be assigned to the State in 
which the individual had his or her last official station prior to 
filing a first claim unless:
    (i) At the time a first claim is filed the individual resides in 
another State in which, after separation from Federal civilian service, 
the individual performed service covered under the State law, in which 
case all of the individual's Federal civilian service and wages shall be 
assigned to the latter State; or
    (ii) Prior to filing a first claim an individual's last official 
station was outside the States, in which case all of the individual's 
Federal civilian service and Federal wages shall be assigned to the 
State in which the individual resides at the time the individual files a 
first claim, provided the individual is personally present in a State 
when the individual files the first claim.
    (2) Federal civilian service and wages assigned to a State in error 
shall be reassigned for use by the proper State agency. An appropriate 
record of a reassignment shall be made by the State agency which makes 
the reassignment.
    (3) Federal civilian service and Federal wages assigned to a State 
shall be transferred to another State where such transfer is necessary 
for the purposes of a combined-wage claim filed by an individual.
    (c) Assignment deemed complete. All of an individual's Federal 
civilian service and Federal wages shall be deemed to have been assigned 
to a State upon the filing of a first claim. Federal civilian

[[Page 54]]

service and Federal wages shall be assigned to a State only in 
accordance with paragraph (b) of this section.
    (d) Use of assigned service and wages. All assigned Federal civilian 
service and Federal wages shall be used only by the State to which 
assigned or transferred in accordance with paragraph (b) of this 
section.



Sec.609.9  Provisions of State law applicable to UCFE claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part or the 
procedures thereunder prescribed by the Department, the terms and 
conditions of the applicable State law which apply to claims for, and 
the payment of, State unemployment compensation shall apply to claims 
for, and the payment of, UCFE and claims for waiting period credit. The 
provisions of the applicable State law which shall apply include, but 
are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals and Federal agencies, as appropriate, 
including notice to each individual of each determination and 
redetermination of eligibility for or entitlement to UCFE;
    (4) Determinations and redeterminations;
    (5) Ability to work, availability for work, and search for work; and
    (6) Disqualifications.
    (b) IBPP. The Interstate Benefit Payment Plan shall apply, where 
appropriate, to individuals filing claims for UCFE.
    (c) Wage combining. The State's provisions complying with the 
Interstate Arrangement for Combining Employment and Wages (part 616 of 
this chapter) shall apply, where appropriate, to individuals filing 
claims for UCFE.
    (d) Procedural requirements. The provisions of the applicable State 
law which apply hereunder to claims for and the payment of UCFE shall be 
applied consistently with the requirements of title III of the Social 
Security Act and the Federal Unemployment Tax Act which are pertinent in 
the case of State unemployment compensation, including but not limited 
to those standards and requirements specifically referred to in the 
provisions of this part, except as provided in paragraph (f) of Sec.
609.6.



Sec.609.10  Restrictions on entitlement.

    (a) Disqualification. If the week of unemployment for which an 
individual claims UCFE is a week to which a disqualification for State 
unemployment compensation applies under the applicable State law, or 
would apply but for the fact that the individual has no right to such 
compensation, the individual shall not be entitled to a payment of UCFE 
for that week.
    (b) Allocation of terminal annual leave payments. Lump-sum terminal 
annual leave payments shall not be allocated by a Federal agency and 
shall be allocated by a State agency in the same manner as similar 
payments to individuals employed by private employers are allocated 
under the applicable State law. In a State in which a private employer 
has an option as to the period to which such payments shall be 
allocated, such payments shall be allocated to the date of separation 
from employment.



Sec.609.11  Overpayments; penalties for fraud.

    (a) False statements and representations. Section 8507(a) of the Act 
provides that if a State agency, the Department, or a court of competent 
jurisdiction finds that an individual--
    (1) Knowingly has made, or caused to be made by another, a false 
statement or representation of a material fact, or knowingly has failed, 
or caused another to fail, to disclose a material fact; and
    (2) As a result of that action has received an amount as UCFE to 
which the individual was not entitled; the individual shall repay the 
amount to the State agency or the Department. Instead of requiring 
repayments, the State agency or the Department may recover the amount by 
deductions from UCFE payable to the individual during the 2-year period 
after the date of the finding. A finding by a State agency or the 
Department may be made only after an opportunity for a fair hearing, 
subject to such further review as may be appropriate under Sec.609.7.

[[Page 55]]

    (b) Prosecution for fraud. Section 1919 of title 18, United States 
Code, provides that whoever makes a false statement or representation of 
a material fact knowing it to be false, or knowingly fails to disclose a 
material fact, to obtain or increase for himself or for any other 
individual any payment authorized to be paid under chapter 85 of title 
5, United States Code, or under an agreement thereunder, shall be fined 
not more than $1,000 or imprisoned not more than one year, or both.
    (c) Absence of fraud. If a State agency or court of competent 
jurisdiction finds that an individual has received a payment of UCFE to 
which the individual was not entitled under the Act and this part, which 
was not due to a false statement or representation as provided in 
paragraph (a) or (b) of this section, the individual shall be liable to 
repay to the applicable State the total sum of the payment to which the 
individual was not entitled, and the State agency shall take all 
reasonable measures authorized under any State law or Federal law to 
recover for the account of the United States the total sum of the 
payment to which the individual was not entitled.
    (d) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any overpayment which is not repaid by the 
individual, by deductions from any UCFE payable to the individual under 
the Act and this part, or from any unemployment compensation payable to 
the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) A State agency shall also recover, insofar as is possible, the 
amount of any overpayment of UCFE made to the individual by another 
State, by deductions from any UCFE payable by the State agency to the 
individual under the Act and this part, or from any unemployment 
compensation payable to the individual under any Federal unemployment 
compensation law administered by the State agency, or from any 
assistance or allowance payable to the individual with respect to 
unemployment under any other Federal law administered by the State 
agency.
    (3) Recoupment of fraudulent overpayments referred to in paragraph 
(a) of this section shall be limited to the 2-year period stated in that 
paragraph. Recoupment of fraudulent overpayments referred to in 
paragraph (b) of this section, and nonfraudulent overpayments referred 
to in paragraph (c) of this section shall be subject to any time 
limitation on recoupment provided for in the State law that applies to 
the case.
    (e) Debts due the United States. UCFE payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person except 
pursuant to a court order for child support or alimony in accordance 
with the law of the State and section 459 of the Social Security Act, 42 
U.S.C. 659.
    (f) Application of State law. (1) Except as indicated in paragraph 
(a) of this section, any provision of State law that may be applied for 
the recovery of overpayments or prosecution for fraud, and any provision 
of State law authorizing waiver of recovery of overpayments of 
unemployment compensation, shall be applicable to UCFE.
    (2) In the case of any finding of false statement or representation 
under the Act and paragraph (a) of this section, or prosecution for 
fraud under 18 U.S.C. 1919 or pursuant to paragraph (f)(1) of this 
section, the individual shall be disqualified or penalized in accordance 
with the provisions of the applicable State law relating to fraud in 
connection with a claim for State unemployment compensation.
    (g) Final decision. Recovery of any overpayment of UCFE shall not be 
enforced by the State agency until the determination or redetermination 
establishing the overpayment has become final, or if appeal is taken 
from the determination or redetermination, until the decision after 
opportunity for a fair hearing has become final.
    (h) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (g)

[[Page 56]]

of Sec.609.6 shall apply to determinations and redeterminations made 
pursuant to this section.
    (2) The provisions of Sec.609.7 shall apply to determinations and 
redeterminations made pursuant to this section.
    (i) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of UCFE shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to State unemployment 
compensation and consistent with the Secretary's ``Standard for Fraud 
and Overpayment Detection'' (Employment Security Manual, part V, section 
7510 et seq.).
    (j) Recovered overpayments. An amount repaid or recouped under this 
section shall be--
    (1) Deposited in the fund from which payment was made, if the 
repayment was to a State agency; or
    (2) Returned to the Treasury of the United States and credited to 
the current applicable appropriation, fund, or account from which 
payment was made, if the repayment was to the Department.



Sec.609.12  Inviolate rights to UCFE.

    Except as specifically provided in this part, the rights of 
individuals to UCFE shall be protected in the same manner and to the 
same extent as the rights of persons to State unemployment compensation 
are protected under the applicable State law. Such measures shall 
include protection of applicants for UCFE from waiver, release, 
assignment, pledge, encumbrance, levy, execution, attachment, and 
garnishment of their rights to UCFE, except as provided in Sec.609.11. 
In the same manner and to the same extent, individuals shall be 
protected from discrimination and obstruction in regard to seeking, 
applying for, and receiving any right to UCFE.



Sec.609.13  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the UCFE Program as the Department 
requires, and will make all such records available for inspection, 
examination, and audit by such Federal officials or employees as the 
Department may designate or as may be required by law.
    (b) Disclosure of Information. Information in records maintained by 
a State agency in administering the UCFE Program shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
State unemployment compensation and the entitlement of individuals 
thereto may be disclosed under the applicable State law. This provision 
on the confidentiality of information maintained in the administration 
of the UCFE Program shall not apply, however, to the Department or for 
the purposes of Sec. Sec.609.11 or 609.13, or in the case of 
information, reports and studies required pursuant to Sec. Sec.609.17 
or 609.25, or where the result would be inconsistent with the Freedom of 
Information Act (5 U.S.C. 552), the Privacy Act of 1974, as amended (5 
U.S.C. 552a), or regulations of the Department promulgated thereunder.

[47 FR 54687, Dec. 3, 1982, as amended at 71 FR 35514, June 21, 2006]



Sec.609.14  Payments to States.

    (a) State entitlement. Each State is entitled to be paid by the 
United States with respect to each individual whose base period wages 
included Federal wages, an amount bearing the same ratio to the total 
amount of compensation paid to such individual as the amount of the 
individual's Federal wages in the individual's base period bears to the 
total amount of the individual's base period wages.
    (b) Payment. Each State shall be paid, either in advance or by way 
of reimbursement, as may be determined by the Department, the sum that 
the Department estimates the State is entitled to receive under the Act 
and this part for each calendar month. The sum shall be reduced or 
increased by the amount which the Department finds that its estimate for 
an earlier calendar month was greater or less than the sum which should 
have been paid to the State. An estimate may be made on the basis of a 
statistical, sampling, or other method agreed on by the Department and 
the State agency.

[[Page 57]]

    (c) Certification by the Department. The Department, from time to 
time, shall certify to the Secretary of the Treasury the sum payable to 
each State under this section. The Secretary of the Treasury, before 
audit or settlement by the General Accounting Office, shall pay the 
State in accordance with the certification from the funds for carrying 
out the purposes of the Act and this part.
    (d) Use of money. Money paid a State under the Act and this part may 
be used solely for the purposes for which it is paid. Money so paid 
which is not used solely for these purposes shall be returned, at the 
time specified by the Agreement, to the Treasury of the United States 
and credited to the current applicable appropriation, fund, or account 
from which payments to states under the Act and this part may be made.



Sec.609.15  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec.609.16  Administration in absence of an Agreement.

    (a) Administering Program. The Department shall administer the UCFE 
Program through personnel of the Department or through other 
arrangements under procedures prescribed by the Department, in the case 
of any State which does not have an Agreement with the Secretary as 
provided for in 5 U.S.C. 8502. The procedures prescribed by the 
Department under this section shall be consistent with the Act and this 
part.
    (b) Applicable State law. On the filing by an individual of a claim 
for UCFE in accordance with arrangements under this section, UCFE shall 
be paid to the individual, if eligible, in the same amount, on the same 
terms, and subject to the same conditions as would be paid to the 
individual under the applicable State law if the individual's Federal 
civilian service and Federal wages had been included as employment and 
wages under the State law. Any such claim shall include the individual's 
Federal civilian service and Federal wages, combined with any service 
and wages covered by State law. However, if the individual, without 
regard to his or her Federal civilian service and Federal wages, has 
employment or wages sufficient to qualify for compensation during the 
benefit year under that State law, then payments of UCFE under this 
section may be made only on the basis of the individual's Federal 
civilian service and Federal wages.
    (c) Fair hearing. An individual whose claim for UCFE is denied under 
this section is entitled to a fair hearing under rules of procedure 
prescribed by the Department. A final determination by the Department 
with respect to entitlement to UCFE under this section is subject to 
review by the courts in the same manner and to the same extent as is 
provided by section 205(g) of the Social Security Act, 42 U.S.C. 405(g).



Sec.609.17  Information, reports, and studies.

    State agencies shall furnish to the Department such information and 
reports and conduct such studies as the Department determines are 
necessary or appropriate for carrying out the purposes of the UCFE 
Program.



             Subpart C_Responsibilities of Federal Agencies



Sec.609.20  Information to Federal civilian employees.

    Each Federal agency shall:
    (a) Furnish information to its employees as to their rights and 
responsibilities under the UCFE Program and 18 U.S.C. 1919; and
    (b) Furnish a completed copy of a form approved by the Department, 
``Notice to Federal Employee About Unemployment Compensation,'' in 
accordance with instructions thereon, to each employee at the time of 
separation from Federal civilian service, when transferred from one 
payroll office to another, or when the office responsible for 
distribution of the form is advised that an individual is in nonpay

[[Page 58]]

status for seven consecutive days or more.



Sec.609.21  Findings of Federal agency.

    (a) Answering request. Within four workdays after receipt from a 
State agency of a request for Federal findings on a form furnished by 
the State agency, and prescribed by the Department, a Federal agency 
shall make such Federal findings, complete all copies of the form, and 
transmit the completed copies to the State agency. If documents 
necessary for completion of the form have been assigned to an agency 
records center or the Federal Records Center in St. Louis, the Federal 
agency shall obtain the necessary information from the records center. 
Any records center shall give priority to such a request.
    (b) Failure to meet time limit. If a completed form containing the 
Federal agency's findings cannot be returned within four workdays of 
receipt, the Federal agency immediately shall inform the State agency, 
and shall include an estimated date by which the completed form will be 
returned.
    (c) Administrative control. Each Federal agency shall maintain a 
control of all requests for Federal findings received by it, and the 
Federal agency's response to each request. The records shall be 
maintained so as to enable the Federal agency to ascertain at any time 
the number of such forms that have not been returned to State agencies, 
and the dates of the Federal agency's receipt of such unreturned forms.



Sec.609.22  Correcting Federal findings.

    If a Federal agency ascertains at any time within one year after it 
has returned a completed form reporting its findings, that any of its 
findings were erroneous, it shall promptly correct its error and forward 
its corrected findings to the State agency.



Sec.609.23  Furnishing additional information.

    On receipt of a request for additional information from a State 
agency, a Federal agency shall consider the information it supplied 
initially in connection with such request and shall review its findings. 
The Federal agency promptly shall forward to the State agency such 
additional findings as will respond to the request. The Federal agency 
shall, if possible, respond within four workdays after the receipt of a 
request under this section.



Sec.609.24  Reconsideration of Federal findings.

    On receipt of a request for reconsideration of Federal findings from 
a State agency, the Federal agency shall consider the initial 
information supplied in connection with such request and shall review 
its findings. The Federal agency shall correct any errors or omissions 
in its findings and shall affirm, modify, or reverse any or all of its 
findings in writing. The Federal agency promptly shall forward its 
reconsidered findings to the requesting authority. The Federal agency 
shall, if possible, respond within four workdays after the receipt of a 
request under this section.



Sec.609.25  Furnishing other information.

    (a) Additional Information. In addition to the information required 
by Sec. Sec.609.21, 609.22, 609.23, and 609.24, a Federal agency shall 
furnish to a State agency or the Department, within the time requested, 
any information which it is not otherwise prohibited from releasing by 
law, which the Department determines is necessary for the administration 
of the UCFE Program.
    (b) Reports. Federal agencies shall furnish to the Department or 
State agencies such reports containing such information as the 
Department determines are necessary or appropriate for carrying out the 
purposes of the UCFE Program.



Sec.609.26  Liaison with Department.

    To facilitate the Department's administration of the UCFE Program, 
each Federal agency shall designate one or more of its officials to be 
the liaison with the Department. Each Federal agency will inform the 
Department of its designation(s) and of any change in a designation.

[[Page 59]]



PART 614_UNEMPLOYMENT COMPENSATION FOR EX-SERVICEMEMBERS--Table of Contents



                      Subpart A_General Provisions

Sec.
614.1 Purpose and application.
614.2 Definitions of terms.

                 Subpart B_Administration of UCX Program

614.3 Eligibility requirements for UCX.
614.4 Weekly and maximum benefit amounts.
614.5 Claims for UCX.
614.6 Determinations of entitlement; notices to individual and Federal 
          military agency.
614.7 Appeal and review.
614.8 The applicable State for an individual.
614.9 Provisions of State law applicable to UCX claims.
614.10 Restrictions on entitlement.
614.11 Overpayments; penalties for fraud.
614.12 Schedules of remuneration.
614.13 Inviolate rights to UCX.
614.14 Recordkeeping; disclosure of information.
614.15 Payments to States.
614.16 Public access to Agreements.
614.17 Administration in absence of an Agreement.
614.18 Information, reports, and studies.

   Subpart C_Responsibilities of Federal Military Agencies and State 
                                Agencies

614.20 Information to ex-servicemembers.
614.21 Findings of Federal military agency.
614.22 Correcting Federal findings.
614.23 Finality of findings.
614.24 Furnishing other information.
614.25 Liaison with Department

Appendix A to Part 614--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 614--Standard for Claim Determination--Separation 
          Information
Appendix C to Part 614--Standard for Fraud and Overpayment Detection

    Authority: 5 U.S.C. 8508; Secretary's Order No. 4-75 (40 FR 18515).

    Source: 47 FR 54697, Dec. 3, 1982, unless otherwise noted.



                      Subpart A_General Provisions



Sec.614.1  Purpose and application.

    (a) Purpose. Subchapter II of chapter 85, title 5 of the United 
States Code (5 U.S.C. 8521-8525) provides for a permanent program of 
unemployment compensation for unemployed individuals separated from the 
Armed Forces. The unemployment compensation provided for in subchapter 
II is hereinafter referred to as Unemployment Compensation for Ex-
servicemembers, or UCX. The regulations in this part are issued to 
implement the UCX Program.
    (b) First rule of construction. The Act and the implementing 
regulations in this part shall be construed liberally so as to carry out 
the purposes of the Act.
    (c) Second rule of construction. The Act and the implementing 
regulations in this part shall be construed so as to assure insofar as 
possible the uniform interpretation and application of the Act 
throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor (hereafter Department), 
not later than 10 days after issuance, a copy of each judicial or 
administrative decision ruling on an individual's entitlement to payment 
of UCX or to credit for a waiting period. On request of the Department, 
a State agency shall forward to the Department a copy of any 
determination or redetermination ruling on an individual's entitlement 
to UCX or waiting period credit.
    (2)(i) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part, the Department may at any time 
notify the State agency of the Department's view. Thereafter, the State 
agency shall issue a redetermination or appeal if possible, and shall 
not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.

[[Page 60]]

    (ii) If the Department believes that a State agency has failed to 
use, or use in a timely manner, the crossmatch mechanism at the claims 
control center designated by the Department, the Department may at any 
time notify the State of the Department's view. Thereafter, the State 
agency shall take action to ensure that operable procedures for the 
effective utilization of the claims control center are in place and 
adhered to. In any case of any determination, redetermination, or 
decision that is not legally warranted under the Act or this part had 
the State used, or used in a timely manner, the crossmatch mechanism at 
the claims control center designated by the Department, State agency 
shall take the steps outlined in paragraph (d)(2)(i) of this section.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part, the Department may at any time notify the State agency 
of the Department's view. If the determination, redetermination, or 
decision in question denies UCX to a claimant, the steps outlined in 
paragraph (2) above shall be followed by the State agency. If the 
determination, redetermination, or decision in question awards UCX to a 
claimant, the benefits are ``due'' within the meaning of section 
303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1), and therefore 
must be paid promptly to the claimant. However, the State agency shall 
take the steps outlined in paragraph (d)(2) of this section, and 
payments to the claimant may be temporarily delayed if redetermination 
or appeal action is taken not more than one business day following the 
day on which the first payment otherwise would be issued to the 
claimant; and the redetermination action is taken or appeal is filed to 
obtain a reversal of the award of UCX and a ruling consistent with the 
Department's view; and the redetermination action or appeal seeks an 
expedited redetermination or appeal within not more than two weeks after 
the redetermination action is taken or the appeal is filed. If 
redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding UCX or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the claimant.
    (4)(i) If any determination, redetermination, or decision, referred 
to in paragraph (d)(2) or paragraph (d)(3) of this section, is treated 
as a precedent for any future UCX claim or claim under the UCFE Program 
(part 609 of this chapter), the Secretary will decide whether the 
Agreement with the State entered into under the Act shall be terminated.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part, including any 
determination, redetermination, or decision referred to in paragraph 
(d)(2) or in paragraph (d)(3) of this section, the Secretary will decide 
whether the State shall be required to restore the funds of the United 
States for any sums paid under such a determination, redetermination, or 
decision, and whether, in absence of such restoration, the Agreement 
with the State shall be terminated and whether other action shall be 
taken to recover such sums for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (d)(2) or paragraph (d)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.

(Approved by the Office of Management and Budget under control number 
1205-0163)

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40553, Oct. 17, 1988; 53 
FR 43799, Oct. 26, 1988; 57 FR 59799, Dec. 15, 1992]



Sec.614.2  Definitions of terms.

    For purposes of the Act and this part:
    (a) Act means subchapter II of chapter 85 of title 5 of the United 
States Code, 5 U.S.C. 8521-8525.
    (b) Agreement means the Agreement entered into pursuant to 5 U.S.C. 
8502 between a State and the Secretary

[[Page 61]]

under which the State agency of the State agrees to make payments of 
unemployment compensation in accordance with the Act and the regulations 
and procedures thereunder prescribed by the Department.
    (c) Base period means the base period as defined by the applicable 
State law for the benefit year.
    (d) Benefit year means the benefit year as defined by the applicable 
State law, and if not so defined the term means the period prescribed in 
the Agreement with the State or, in the absence of an Agreement, the 
period prescribed by the Department.
    (e) Ex-servicemember means an individual who has performed Federal 
military service.
    (f) Federal military agency means any of the Armed Forces of the 
United States, including the Army, Air Force, Navy, Marine Corps, and 
Coast Guard, and the National Oceanic and Atmospheric Administration 
(Department of Commerce).
    (g) Federal military service means active service (not including 
active duty in a reserve status unless for a continuous period of 90 
days or more) in the Armed Forces or the Commissioned Corps of the 
National Oceanic and Atmospheric Administration if with respect to that 
service--
    (1) The individual was discharged or released under honorable 
conditions (and, if an officer, did not resign for the good of the 
service); and
    (2)(i) The individual was discharged or released after completing 
his/her first full term of active service which the individual initially 
agreed to serve, or
    (ii) The individual was discharged or released before completing 
such term of active service--
    (A) For the convenience of the Government under an early release 
program,
    (B) Because of medical disqualification, pregnancy, parenthood, or 
any service-incurred injury or disability,
    (C) Because of hardship, or
    (D) Because of personality disorders or inaptitude but only if the 
service was continuous for 365 days or more.
    (h) Federal military wages means all pay and allowances in cash and 
in kind for Federal military service, computed on the basis of the pay 
and allowances for the pay grade of the individual at the time of his or 
her latest discharge or release from Federal/military service, as 
determined in accordance with the Schedule of Remuneration applicable at 
the time the individual files his or her first claim for compensation 
for a benefit year.
    (i) First claim means an initial claim for unemployment compensation 
under the UCX Program, the UCFE Program (part 609 of this chapter), or a 
State law, or some combination thereof, first filed by an individual 
after the individual's latest discharge or release from Federal military 
service, whereby a benefit year is established under an applicable State 
law.
    (j) Military document means an official document or documents issued 
to an individual by a Federal military agency relating to the 
individual's Federal military service and discharge or release from such 
service.
    (k) Period of active service means a period of continuous active 
duty (including active duty for training purposes) in a Federal military 
agency or agencies, beginning with the date of entry upon active duty 
and ending on the effective date of the first discharge or release 
thereafter which is not qualified or conditional.
    (l) Schedule of Remuneration means the schedule issued by the 
Department from time to time under 5 U.S.C. 8521(a)(2) and this part, 
which specifies for purposes of the UCX Program, the pay and allowances 
for each pay grade of servicemember.
    (m) Secretary means the Secretary of Labor of the United States.
    (n) State means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.
    (o) State agency means the agency of the State which administers the 
applicable State unemployment compensation law and is administering the 
UCX Program in the State pursuant to an Agreement with the Secretary.
    (p)(1) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of

[[Page 62]]

1986, 26 U.S.C. 3304, if the State is certified under section 3304(c) of 
the Internal Revenue Code of 1986, 26 U.S.C. 3304(c).
    (2) Applicable State law means the State law made applicable to a 
UCX claimant by Sec.614.8.
    (q)(1) Unemployment compensation means cash benefits (including 
dependents' allowances) payable to individuals with respect to their 
unemployment, and includes regular, additional, emergency, and extended 
compensation.
    (2) Regular compensation means unemployment compensation payable to 
an individual under any State law, but not including additional 
compensation or extended compensation.
    (3) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors.
    (4) Emergency compensation means supplementary unemployment 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Extended compensation means unemployment compensation payable to 
an individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970, as 
amended, 26 U.S.C. 3304 note, and part 615 of this chapter, with respect 
to the payment of extended compensation.
    (r) Unemployment Compensation for Ex-Servicemember means the 
unemployment compensation payable under the Act to claimants eligible 
for the payments, and is referred to as UCX.
    (s) Week means, for purposes of eligibility for and payment of UCX, 
a week as defined in the applicable State law.
    (t) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to all employment 
and earnings, and in the same manner and to the same extent for the 
purposes of the UCX Program, as if the individual filing for UCX were 
filing a claim for State unemployment compensation.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 53 
FR 43799, Oct. 26, 1988; 57 FR 59799, Dec. 15, 1992]



                 Subpart B_Administration of UCX Program



Sec.614.3  Eligibility requirements for UCX.

    An individual shall be eligible to receive a payment of UCX or 
waiting period credit with respect to a week of unemployment if:
    (a) The individual has Federal military service and Federal military 
wages in the base period under the applicable State law;
    (b) The individual meets the qualifying employment and wage 
requirements of the applicable State law, either on the basis of Federal 
military service and Federal military wages alone or in combination with 
service and wages covered under a State law or under the UCFE Program 
(part 609 of this chapter);
    (c) The individual has filed an initial claim for UCX and, as 
appropriate, has filed a timely claim for waiting period credit or 
payment of UCX with respect to that week of unemployment; and
    (d) The individual is totally, part-totally, or partially 
unemployed, and is able to work, available for work, and seeking work 
within the meaning of or as required by the applicable State law, and is 
not subject to disqualification under this part or the applicable State 
law, with respect to that week of unemployment.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 57 
FR 59799, Dec. 15, 1992]



Sec.614.4  Weekly and maximum benefit amounts.

    (a) Total unemployment. The weekly amount of UCX payable to an 
eligible individual for a week of total unemployment shall be the amount 
that would be payable to the individual as unemployment compensation for 
a week of total unemployment as determined under the applicable State 
law.

[[Page 63]]

    (b) Partial and part-total unemployment. The weekly amount of UCX 
payable for a week of partial or part-total unemployment shall be the 
amount that would be payable to the individual as unemployment 
compensation for a week of partial or part-total unemployment as 
determined under the applicable State law.
    (c) Maximum amount. The maximum amount of UCX which shall be payable 
to an eligible individual during and subsequent to the individual's 
benefit year shall be the maximum amount of all unemployment 
compensation that would be payable to the individual as determined under 
the applicable State law.
    (d) Computation rules. The weekly and maximum amounts of UCX payable 
to an individual under the UCX Program shall be determined under the 
applicable State law to be in the same amount, on the same terms, and 
subject to the same conditions as the State unemployment compensation 
which would be payable to the individual under the applicable State law 
if the individual's Federal military service and Federal military wages 
assigned or transferred under this part to the State had been included 
as employment and wages covered by that State law, subject to the use of 
the applicable Schedule of Remuneration.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 57 
FR 59800, Dec. 15, 1992]



Sec.614.5  Claims for UCX.

    (a) First claims. A first claim for UCX shall be filed by an 
individual in any State agency of any State according to the applicable 
State law, and on a form prescribed by the Department which shall be 
furnished to the individual by the State agency where the claim is 
filed.
    (b) Weekly claims. Claims for waiting week credit and payments of 
UCX for weeks of unemployment shall be filed in any State agency (or 
Canada) at the times and in the manner as claims for State unemployment 
compensation are filed under the applicable State law, and on forms 
prescribed by the Department which shall be furnished to the individual 
by the State agency where the claim is filed.
    (c) Secretary's standard. The procedures for reporting and filing 
claims for UCX and waiting period credit shall be consistent with this 
part 614 and the Secretary's ``Standard for Claim Filing, Claimant 
Reporting, Job Finding and Employment Services'' in the Employment 
Security Manual, part V, sections 5000-5004 (appendix A of this part).

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988]



Sec.614.6  Determinations of entitlement; notices to individual and 
Federal military agency.

    (a) Determinations of first claim. Except for findings of a Federal 
military agency and the applicable Schedule of Remuneration which are 
final and conclusive under Sec.614.23, the State agency whose State 
law applies to an individual under Sec.614.8 shall, promptly upon the 
filing of a first claim for UCX, determine whether the individual is 
otherwise eligible, and, if the individual is found to be eligible, the 
individual's benefit year and the weekly and maximum amounts of UCX 
payable to the individual.
    (b) Determinations of weekly claims. The State agency promptly 
shall, upon the filing of a claim for a payment of UCX or waiting period 
credit with respect to a week, determine whether the individual is 
entitled to a payment of UCX or waiting period credit respect to such 
week, and, if entitled, the amount of UCX or waiting period credit to 
which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to State unemployment 
compensation under the applicable State law shall apply to 
determinations pertaining to UCX.
    (d) Notices to individual and Federal military agency. (1) The State 
agency promptly shall give notice in writing to the individual of any 
determination or redetermination of a first claim, and, except as may be 
authorized under paragraph (g) of this section, of any determination or 
redetermination of any weekly claim which denies UCX or waiting period 
credit or reduces the weekly amount or maximum amount

[[Page 64]]

initially determined to be payable. Each notice of determination or 
redetermination shall include such information regarding the 
determination or redetermination and notice of right to reconsideration 
or appeal, or both, as is furnished with written notices of 
determinations and redeterminations with respect to claims for State 
unemployment compensation. Such notice shall include the findings of any 
Federal military agency utilized in making the determination or 
redetermination, and shall inform the individual of the finality of 
Federal findings and the individual's right to request correction of 
such findings as is provided in Sec.614.22.
    (2) A notice of claim filing and subsequent notices of monetary and 
nonmonetary determinations on a UCX claim shall be sent to each Federal 
military agency for which the individual performed Federal military 
service during the appropriate base period, together with notice of 
appeal rights of the Federal military agency to the same extent that 
chargeable employers are given such notices under State law and practice 
unless an alternate mechanism is established by the Department of Labor 
in lieu of such notices.
    (e) Obtaining information for claim determinations. (1) Information 
required for the determination of claims for UCX shall be obtained by 
the State agency from claimants, employers, and others, in the same 
manner as information is obtained for claim purposes under the 
applicable State law, but Federal military findings shall be obtained 
from military documents, the applicable Schedule of Remuneration, and 
from Federal military agencies as prescribed in Sec. Sec.614.21 
through 614.24.
    (f) Promptness. Full payment of UCX when due shall be consistent 
with this part and shall be made with the greatest promptness that is 
administratively feasible, but the provisions of part 640 of this 
chapter (relating to promptness of benefit payments) shall not be 
applicable to the UCX Program.
    (g) Secretary's standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for UCX 
and to appropriate Federal military agencies shall be consistent with 
this part 614 and the Secretary's ``Standard for Claim Determinations-
Separation Information'' in the Employment Security Manual, part V, 
sections 6010-6015 (Appendix B of this part).

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 71 
FR 35514, June 21, 2006]



Sec.614.7  Appeal and review.

    (a) Applicable State Law. The provisions of the applicable State law 
concerning the right of appeal and fair hearing from a determination or 
redetermination of entitlement to State unemployment compensation 
(exclusive of findings which are final and conclusive under Sec.
614.25) shall apply to determinations and redeterminations of 
eligibility for or entitlement to UCX and waiting period credit. Any 
such determination or redetermination shall be subject to appeal and 
review only in the manner and to the extent provided in the applicable 
State law with respect to determinations and redeterminations of 
entitlement to State unemployment compensation.

(Section 614.24 governs appeals of findings of the Veterans 
Administration)

    (b) Rights of appeal and fair hearing. The provisions on right of 
appeal and opportunity for a fair hearing with respect to claims for UCX 
shall be consistent with this part and with sections 303(a)(1) and 
303(a)(3) of the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (c) Promptness on appeals. (1) Decisions on appeals under the UCX 
Program shall accord with the Secretary's ``Standard for Appeals 
Promptness--Unemployment Compensation'' in part 650 of this chapter, and 
with Sec.614.1(d).
    (2) Any provision of an applicable State law for advancement or 
priority of unemployment compensation cases on judicial calendars, or 
otherwise intended to provide for the prompt payment of unemployment 
compensation when due, shall apply to proceedings involving claims for 
UCX.

[[Page 65]]

    (d) Appeal and review by Federal military agency. If a Federal 
military agency believes that a State agency's determination or 
redetermination of an individual's eligibility for or entitlement to UCX 
is incorrect, the Federal military agency may seek appeal and review of 
such determination or redetermination in the same manner as an 
interested employer may seek appeal and review under the applicable 
State law.



Sec.614.8  The applicable State for an individual.

    (a) The applicable State. The applicable State for an individual 
shall be the State to which the individual's Federal military service 
and Federal military wages are assigned or transferred under this 
section. The applicable State law for the individual shall be the State 
law of such State.
    (b) Assignment of service and wages. (1) When an individual files a 
first claim, all of the individual's Federal military service and 
Federal military wages shall be deemed to be assigned to the State in 
which such claim is filed, which shall be the ``Paying State'' in the 
case of a combined-wage claim. (Sec.616.6(e) of this chapter.)
    (2) Federal military service and Federal military wages assigned to 
a State in error shall be reassigned for use by the proper State agency. 
An appropriate record of the reassignment shall be made by the State 
agency which makes the reassignment.
    (c) Assignment deemed complete. All of an individual's Federal 
military service and Federal military wages shall be deemed to have been 
assigned to a State upon the filing of a first claim. Federal military 
service and Federal military wages shall be assigned to a State only in 
accordance with paragraph (b) of this section.
    (d) Use of assigned service and wages. All assigned Federal military 
service and Federal military wages shall be used only by the State to 
which assigned in accordance with paragraph (b) of this section, except 
that any Federal military service and Federal military wages which are 
not within the base period of the State to which they were assigned 
shall be subject to transfer in accordance with part 616 of this chapter 
for the purposes of any subsequent Combined-Wage Claim filed by the 
individual.



Sec.614.9  Provisions of State law applicable to UCX claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part or the 
procedures thereunder prescribed by the Department, the terms and 
conditions of the applicable State law which apply to claims for, and 
the payment of, State unemployment compensation shall apply to claims 
for, and the payment of, UCX and claims for waiting period credit. The 
provisions of the applicable State law which shall apply include, but 
are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals, as appropriate, including notice to each 
individual of each determination and redetermination of eligibility for 
or entitlement to UCX;
    (4) Determinations and redeterminations;
    (5) Ability to work, availability for work, and search for work; and
    (6) Disqualifications, except in regard to separation from any 
Federal military agency.
    (b) IBPP. The Interstate Benefit Payment Plan shall apply, where 
appropriate, to individuals filing claims for UCX.
    (c) Wage combining. The State's provisions complying with the 
Interstate Arrangement for Combining Employment and Wages (part 616 of 
this chapter) shall apply, where appropriate, to individuals filing 
claims for UCX.
    (d) Procedural requirements. The provisions of the applicable State 
law which apply hereunder to claims for and the payment of UCX shall be 
applied consistently with the requirements of title III of the Social 
Security Act and the Federal Unemployment Tax Act which are pertinent in 
the case of State unemployment compensation, including but not limited 
to those standards and requirements specifically referred to in the 
provisions of this part, except as provided in paragraph (f) of Sec.
614.6.

[[Page 66]]



Sec.614.10  Restrictions on entitlement.

    (a) Disqualification. If the week of unemployment for which an 
individual claims UCX is a week to which a disqualification for State 
unemployment compensation applies under the applicable State law, the 
individual shall not be entitled to a payment of UCX for that week. As 
provided in Sec.614.9(a), no disqualification shall apply in regard to 
separation from any Federal military agency.
    (b) Effect of ``days lost''. The continuity of a period of an 
individual's Federal military service shall not be deemed to be 
interrupted by reason of any ``days lost'' in such period, but ``days 
lost'' shall not be counted for purposes of determining:
    (1) Whether an individual has performed Federal military service;
    (2) Whether an individual meets the wage and employment requirements 
of a State law; or
    (3) The amount of an individual's Federal military wages.
    (c) Allocation of military accrued leave. A State agency shall 
allocate the number of days of unused military leave specified in an ex-
servicemember's military document, for which a lump-sum payment has been 
made, in the same manner as similar payments by private employers to 
their employees are allocated under the applicable State law, except 
that the applicable Schedule of Remuneration instead of the lump-sum 
payment shall be used to determine the amount of the claimant's Federal 
military wages. In a State in which a private employer has an option as 
to the period to which such payments shall be allocated, such payments 
shall be allocated to the date of the individual's latest discharge or 
release from Federal military service. An allocation under this 
paragraph shall be disregarded in determining whether an individual has 
had a period of active service constituting Federal military service.
    (d) Education and training allowances. An individual is not entitled 
to UCX under the Act or this part for a period with respect to which the 
individual receives:
    (1) A subsistence allowance for vocational rehabilitation training 
under chapter 31 of title 38 of the United States Code, 38 U.S.C. 1501 
et seq., or under part VIII of Veterans Regulation Numbered 1(a); or
    (2) An educational assistance allowance or special training 
allowance under chapter 35 of title 38 of the United States Code, 38 
U.S.C. 1700 et seq.



Sec.614.11  Overpayments; penalties for fraud.

    (a) False statements and representations. Section 8507(a) of the Act 
provides that if a State agency, the Department, or a court of competent 
jurisdiction finds that an individual--
    (1) Knowingly has made, or caused to be made by another, a false 
statement or representation of a material fact, or knowingly has failed, 
or caused another to fail, to disclose a material fact; and
    (2) As a result of that action has received an amount as UCX to 
which the individual was not entitled; the individual shall repay the 
amount to the State agency or the Department. Instead of requiring 
repayment, the State agency or the Department may recover the amount by 
deductions from UCX payable to the individual during the 2-year period 
after the date of the finding. A finding by a State agency or the 
Department may be made only after an opportunity for a fair hearing, 
subject to such further review as may be appropriate under Sec.614.7.
    (b) Prosecution for fraud. Section 1919 of title 18, United States 
Code, provides that whoever makes a false statement or representation of 
a material fact knowing it to be false, or knowingly fails to disclose a 
material fact, to obtain or increase for himself or for any other 
individual any payment authorized to be paid under chapter 85 of title 
5, United States Code, or under an agreement thereunder, shall be fined 
not more than $1,000 or imprisoned not more than one year, or both.
    (c) Absence of fraud. If a State agency or court of competent 
jurisdiction finds that an individual has received a payment of UCX to 
which the individual was not entitled under the Act and this part, which 
was not due to a false statement or representation as provided in 
paragraph (a) or (b) of this section, the individual shall be liable to

[[Page 67]]

repay to the applicable State the total sum of the payment to which the 
individual was not entitled, and the State agency shall take all 
reasonable measures authorized under any State law or Federal law to 
recover for the account of the United States the total sum of the 
payment to which the individual was not entitled.
    (d) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any overpayment which is not repaid by the 
individual, by deductions from any UCX payable to the individual under 
the Act and this part, or from any unemployment compensation payable to 
the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) A State agency shall also recover, insofar as is possible, the 
amount of any overpayment of UCX made to the individual by another State 
by deductions from any UCX payable by the State agency to the individual 
under the Act and this part, or from any unemployment compensation 
payable to the individual under any Federal unemployment compensation 
law administered by the State agency, or from any assistance or 
allowance payable to the individual with respect to unemployment under 
any other Federal law administered by the State agency.
    (3) Recoupment of fraudulent overpayments referred to in paragraph 
(a) of this section shall be limited to the 2-year period stated in that 
paragraph. Recoupment of fraudulent overpayments referred to in 
paragraph (b) of this section, and nonfraudulent overpayments referred 
to in paragraph (c) of this section shall be subject to any time 
limitation on recoupment provided for in the State law that applies to 
the case.
    (e) Debts due the United States. UCX payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person except 
pursuant to a court order for child support or alimony in accordance 
with the law of the State and section 459 of the Social Security Act, 42 
U.S.C. 659.
    (f) Application of State law. (1) Except as indicated in paragraph 
(a) of this section, any provision of State law that may be applied for 
the recovery of overpayments or prosecution for fraud, and any provision 
of State law authorizing waiver of recovery of overpayments of 
unemployment compensation, shall be applicable to UCX.
    (2) In the case of any finding of false statement of representation 
under the Act and paragraph (a) of this section, or prosecution for 
fraud under 18 U.S.C. 1919 or pursuant to paragraph (f)(1) of this 
section, the individual shall be disqualified or penalized in accordance 
with the provision of the applicable State law relating to fraud in 
connection with a claim for State unemployment compensation.
    (g) Final decision. Recovery of any overpayment of UCX shall not be 
enforced by the State agency until the determination or redetermination 
establishing the overpayment has become final, or if appeal is taken 
from the determination or redetermination, until the decision after 
opportunity for a fair hearing has become final.
    (h) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (g) of Sec.614.6 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec.614.7 shall apply to determinations and 
redeterminations made pursuant to this section.
    (i) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of UCX shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to State unemployment 
compensation and consistent with this part 614 and the Secretary's 
``Standard for Fraud and Overpayment Detection'' in the Employment 
Security Manual, part V, sections 7510-7515 (Appendix C of this part), 
and provide for timely use of any crossmatch

[[Page 68]]

mechanism established by the Department.
    (j) Recovered overpayments. An amount repaid or recouped under this 
section shall be--
    (1) Deposited in the fund from which payment was made, if the 
repayment was to a State agency; or
    (2) Returned to the Treasury of the United States and credited to 
the current applicable appropriation, fund, or account from which 
payment was made, if the repayment was to the Department.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40555, Oct. 17, 1988]



Sec.614.12  Schedules of remuneration.

    (a) Authority. Section 8521(a)(2) of chapter 85, title 5 of the 
United States Code, 5 U.S.C. 8521(a)(2), requires the Secretary of Labor 
to issue from time to time, after consultation with the Secretary of 
Defense, a Schedule of Remuneration specifying the pay and allowances 
for each pay grade of members of the Armed Forces.
    (b) Elements of schedule. A schedule reflects representative amounts 
for appropriate elements of the pay and allowances, whether in cash or 
kind, for each pay grade of members of the Armed Forces, with a 
statement of the effective date of the schedule. Benefit amounts for the 
UCX Program are computed on the basis of the Federal military wages for 
the pay grade of the individual at the time of the individual's latest 
discharge or release from Federal military service, as specified in the 
schedule applicable at the time the individual files his or her first 
claim for compensation for the benefit year.
    (c) Effective date. Any new Schedule of Remuneration shall take 
effect beginning with the first week of the calendar quarter following 
the calendar quarter in which such schedule is issued, and shall remain 
applicable until a subsequent schedule becomes effective. Prior 
schedules shall continue to remain applicable for the periods they were 
in effect.
    (d) Publication. Any new Schedule of Remuneration shall be issued by 
the Secretary of Labor to the State agencies and the Federal military 
agencies. Promptly after the issuance of a new Schedule of Remuneration 
it shall be published as a notice in the Federal Register.



Sec.614.13  Inviolate rights to UCX.

    Except as specifically provided in this part, the rights of 
individuals to UCX shall be protected in the same manner and to the same 
extent as the rights of persons to State unemployment compensation are 
protected under the applicable State law. Such measures shall include 
protection of applicants for UCX from waiver, release, assignment, 
pledge, encumbrance, levy, execution, attachment, and garnishment of 
their rights to UCX, except as provided in Sec.614.11. In the same 
manner and to the same extent, individuals shall be protected from 
discrimination and obstruction in regard to seeking, applying for, and 
receiving any right to UCX.



Sec.614.14  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the UCX Program as the Department 
requires, and will make all such records available for inspection, 
examination, and audit by such Federal officials or employees as the 
Department may designate or as may be required by law.
    (b) Disclosure of information. Information in records maintained by 
a State agency in administering the UCX Program shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
State unemployment compensation and the entitlement of individuals 
thereto may be disclosed under the applicable State law. This provision 
on the confidentiality of information maintained in the administration 
of the UCX Program shall not apply, however, to the Department or for 
the purposes of Sec. Sec.614.11 or 614.14, or in the case of 
information, reports and studies required pursuant to Sec. Sec.614.18 
or 614.26, or where the result would be inconsistent with the Freedom of 
Information Act, 5 U.S.C. 552, the Privacy Act of 1974, 5 U.S.C. 552a, 
or regulations of the Department promulgated thereunder.

[[Page 69]]



Sec.614.15  Payments to States.

    (a) State entitlement. Each State is entitled to be paid by the 
United States with respect to each individual whose base period wages 
included Federal military wages, an amount bearing the same ratio to the 
total amount of compensation paid to such individual as the amount of 
the individual's Federal military wages in the individual's base period 
bears to the total amount of the individual's base period wages.
    (b) Payment. Each State shall be paid, either in advance or by way 
of reimbursement, as may be determined by the Department, the sum that 
the Department estimates the State is entitled to receive under the Act 
and this part for each calendar month. The sum shall be reduced or 
increased by the amount which the Department finds that its estimate for 
an earlier calendar month was greater or less than the sum which should 
have been paid to the State. An estimate may be made on the basis of a 
statistical, sampling, or other method agreed on by the Department and 
the State agency.
    (c) Certification by the Department. The Department, from time to 
time, shall certify to the Secretary of the Treasury the sum payable to 
each State under this section. The Secretary of the Treasury, before 
audit or settlement by the General Accounting Office, shall pay the 
State in accordance with the certification from the funds for carrying 
out the purposes of the Act and this part.
    (d) Use of money. Money paid a State under the Act and this part may 
be used solely for the purposes for which it is paid. Money so paid 
which is not used solely for these purposes shall be returned, at the 
time specified by the Agreement, to the Treasury of the United States 
and credited to the current applicable appropriation, fund, or account 
from which payments to States under the Act and this part may be made.



Sec.614.16  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec.614.17  Administration in absence of an Agreement.

    (a) Administering program. The Department shall administer the UCX 
Program through personnel of the Department or through other 
arrangements under procedures prescribed by the Department, in the case 
of any State which does not have an Agreement with the Secretary as 
provided for in 5 U.S.C. 8502. The procedures prescribed by the 
Department under this section shall be consistent with the Act and this 
part.
    (b) Applicable State law. On the filing by an individual of a claim 
for UCX in accordance with arrangements under this section, UCX shall be 
paid to the individual, if eligible, in the same amount, on the same 
terms, and subject to the same conditions as would be paid to the 
individual under the applicable State law if the individual's Federal 
military service and Federal military wages had been included as 
employment and wages under the State law. Any such claims shall include 
the individual's Federal military service and Federal military wages, 
combined with any service and wages covered by State law. However, if 
the individual, without regard to his or her Federal military service 
and Federal military wages, has employment or wages sufficient to 
qualify for compensation during the benefit year under that State law, 
then payments of UCX under this section may be made only on the basis of 
the individual's Federal military service and Federal military wages.
    (c) Fair hearing. An individual whose claim for UCX is denied under 
this section is entitled to a fair hearing under rules of procedures 
prescribed by the Department. A final determination by the Department 
with respect to entitlement to UCX under this section is subject to 
review by the courts in the same manner and to the same extent as is 
provided by section 205(g) of the Social Security Act, 42 U.S.C. 405(g).

[[Page 70]]



Sec.614.18  Information, reports, and studies.

    State agencies shall furnish to the Department such information and 
reports and conduct such studies as the Department determines are 
necessary or appropriate for carrying out the purposes of the UCX 
Program.



   Subpart C_Responsibilities of Federal Military Agencies and State 
                                Agencies



Sec.614.20  Information to ex-servicemembers.

    At the time of discharge or release from Federal military service, 
each Federal military agency shall furnish to each ex-servicemember 
information explaining rights and responsibilities under the UCX Program 
and 18 U.S.C. 1919, and military documents necessary for filing claims 
for UCX.



Sec.614.21  Findings of Federal military agency.

    (a) Findings in military documents. Information contained in a 
military document furnished to an ex-servicemember shall constitute 
findings to which Sec.614.23 applies as to:
    (1) Whether the individual has performed active service in the Armed 
Forces or the Commissioned Corps of the National Oceanic and Atmospheric 
Administration;
    (2) The beginning and ending dates of the period of active service 
and ``days lost'' during such period;
    (3) The type of discharge or release terminating the period of 
active service;
    (4) The individuals' pay grade at the time of discharge or release 
from active service; and
    (5) The narrative reason or other reason for separation from active 
service.
    (b) Discharges not under honorable conditions. A military document 
which shows that an individual's discharge or release was under other 
than honorable conditions shall also be a finding to which Sec.614.23 
applies.

[53 FR 40555, Oct. 17, 1988]



Sec.614.22  Correcting Federal findings.

    (a) Request for correction. (1) If an individual believes that a 
finding specified in Sec.614.21 is incorrect or that information as to 
any finding has been omitted from a military document, the individual 
may request the issuing Federal military agency to correct the military 
document. A request for correction may be made through the State agency, 
which shall forward such request and any supporting information 
submitted by the individual to the Federal military agency.
    (2) The Federal military agency shall promptly forward to the 
individual or State agency making the request the corrected military 
document. Information contained in a corrected military document issued 
pursuant to such a request shall constitute the findings of the Federal 
military agency under Sec.614.21.
    (3) If a determination or redetermination based on a finding as to 
which correction is sought has been issued by a State agency before a 
request for correction under this paragraph is made, the individual who 
requested such correction shall file a request for redetermination or 
appeal from such determination or redetermination with the State agency, 
and shall inform the State agency of the request for correction.
    (4) An individual who files a request for correction of findings 
under this paragraph shall promptly notify the State agency of the 
action of the Federal military agency on such request.
    (b) State agency procedure when request made. (1) If a determination 
of entitlement has not been made when an individual notifies a State 
agency of a request for correction under paragraph (a) of this section, 
the State agency may postpone such determination until the individual 
has notified the State agency of the action of the Federal military 
agency on the request.
    (2) If a determination of entitlement has been made when an 
individual notifies a State agency that a request for correction of 
Federal findings has been made, or if an individual notifies a State 
agency prior to a determination of entitlement that a request has been 
made but such determination is not postponed by the State agency, the 
individual may file a request for redetermination or appeal in 
accordance with the applicable State law.

[[Page 71]]

    (3) Except as provided in paragraph (c) of this section, no 
redetermination shall be made or hearing scheduled on an appeal until 
the individual has notified the State agency of the action of the 
Federal military agency on a request for correction under paragraph (a) 
of this section.
    (c) State agency procedure when request answered. On receipt of 
notice of the action of a Federal military agency on a request for 
correction of its findings, a State agency shall:
    (1) Make a timely determination or redetermination of the 
individual's entitlement, or
    (2) Promptly schedule a hearing on the individual's appeal.

If such notice is not received by a State agency within one year of the 
date on which an individual first filed a claim, or such notice is not 
given promptly by an individual, a State agency without further 
postponement may make such determination or redetermination or schedule 
such hearing.
    (d) Findings corrected without request. Information as to any 
finding specified in Sec.614.21 contained in a corrected military 
document issued by a Federal military agency on its own motion shall 
constitute the findings of such agency under Sec.614.21, if notice 
thereof is received by a State agency before the period for 
redetermination or appeal has expired under the State law. On timely 
receipt of such notice a State agency shall take appropriate action 
under the applicable State law to give effect to the corrected findings.



Sec.614.23  Finality of findings.

    The findings of a Federal military agency referred to in Sec. Sec.
614.21 and 614.22, and the Schedules of Remuneration issued by the 
Department pursuant to the Act and Sec.614.12, shall be final and 
conclusive for all purposes of the UCX Program, including appeal and 
review pursuant to Sec.614.7 or Sec.614.17.

[53 FR 40555, Oct. 17, 1988]



Sec.614.24  Furnishing other information.

    (a) Additional information. In addition to the information required 
by Sec. Sec.614.21 and 614.22, a Federal military agency shall furnish 
to a State agency or the Department, within the time requested, any 
information which it is not otherwise prohibited from releasing by law, 
which the Department determines is necessary for the administration of 
the UCX Program.
    (b) Reports. Federal military agencies shall furnish to the 
Department or State agencies such reports containing such information as 
the Department determines are necessary or appropriate for carrying out 
the purposes of the UCX Program.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40555, Oct. 17, 1988]



Sec.614.25  Liaison with Department

    To facilitate the Department's administration of the UCX program, 
each Federal military agency shall designate one or more of its 
officials to be the liaison with the Department. Each Federal military 
agency will inform the Department of its designation(s) and of any 
change in a designation.

[53 FR 40555, Oct. 17, 1988]



    Sec. Appendix A to Part 614--Standard for Claim Filing, Claimant 
             Reporting, Job Finding, and Employment Services

        Employment Security Manual (Part V, Sections 5000-5004) *
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    * Revises subgrouping 5000-5004.
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                         5000-5099 Claims Filing

5000 Standards for Claim Filing, Claimant Reporting, Job Finding, and 
          Employment Services
    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for:
    ``Payment of unemployment compensation solely through public 
employment offices or such other agencies as the Secretary may 
approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law provide 
for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''

[[Page 72]]

    B. Secretary's interpretation of Federal law requirements.
    1. The Secretary interprets section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act to 
require that a State law provide for payment of unemployment 
compensation solely through public employment offices or claims offices 
administered by the State employment security agency if such agency 
provides for such coordination in the operations of its public 
employment offices and claims offices as will insure: (a) The payment of 
benefits only to individuals who are unemployed and who are able to work 
and available for work, and (b) that individuals claiming unemployment 
compensation (claimants) are afforded such placement and other 
employment services as are necessary and appropriate to return them to 
suitable work as soon as possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for:
    a. Such contact by claimants with public employment offices or 
claims offices or both, (1) as will reasonably insure the payment of 
unemployment compensation only to individuals who are unemployed and who 
are able to work and available for work, and (2) that claimants are 
afforded such placement and other employment services as are necessary 
and appropriate to facilitate their return to suitable work as soon as 
possible; and
    b. Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such State law.

5001 Claim Filing and Claimant Reporting Requirements Designed to 
Satisfy Secretary's Interpretation
    A. Claim filing--total or part-total unemployment.
    1. Individuals claiming unemployment compensation for total or part-
total unemployment are required to file a claim weekly or biweekly, in 
person or by mail, at a public employment office or a claims office 
(these terms include offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person:
    a. His new claim with respect to a benefit year, or his continued 
claim for a waiting week or for his first compensable week of 
unemployment in such year; and
    b. Any other claim, when requested to do so by the claims personnel 
at the office at which he files his claim(s) because questions about his 
right to benefits are raised by circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirement; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances:
    a. He is located in an area requiring the expenditure of an 
unreasonable amount of time or money in traveling to the nearest 
facility established by the State agency for filing claims in person;
    b. Conditions make it impracticable for the agency to take claims in 
person;
    c. He has returned to full-time work on or before the scheduled date 
for his filing a claim, unless the agency makes provision for in-person 
filing at a time and place that does not interfere with his employment;
    d. The agency finds that he has good cause for failing to file a 
claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

5002 Requirement for Job Finding, Placement, and other Employment 
Services Designed to Satisfy Secretary's Interpretation

[[Page 73]]

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency:
    1. The claims personnel are required to give each claimant such 
necessary and appropriate assistance as they reasonably can in finding 
suitable work and at their discretion determine when more complete 
placement and employment services are necessary and appropriate for a 
claimant; and if they determine more complete services are necessary and 
appropriate, the claims personnel are to refer him to employment service 
personnel in the public employment office in which he has been filing 
claim(s), or, if he has been filing in a claims office, in the public 
employment office most accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him, in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.
    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel are required to 
so arrange and coordinate the contacts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) His failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

5004 Evaluation of Alternative State Provisions. If the State law 
provisions do not conform to the ``suggested State law requirements'' 
set forth in sections 5001 and 5002, but the State law contains 
alternative provisions, the Manpower Administrator, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative provisions. If the Manpower Administrator concludes that 
the alternative provisions satisfy the requirements of the Federal law 
as construed by the Secretary (see section 5000 B) he will so notify the 
State agency. If he does not so conclude, he will submit the matter to 
the Secretary. If the Secretary concludes that the alternative 
provisions satisfy such requirements, the State agency will be so 
notified. If the Secretary concludes that there is a question as to 
whether the alternative provisions satisfy such requirements, the State 
agency will be advised that unless the State law provisions are 
appropriately revised, a notice of hearing will be issued as required by 
the Code

[[Page 74]]

of Federal Regulations, title 20, section 601.3.

[53 FR 40555, Oct. 17, 1988; 53 FR 43799, Oct. 26, 1988]



     Sec. Appendix B to Part 614--Standard for Claim Determination--
                         Separation Information

         Employment Security Manual (Part V, Sections 6010-6015)

6010-6019 Standard for Claim Determinations--Separation Information *
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    * Revises subgrouping 6010-6019
---------------------------------------------------------------------------

6010 Federal Law Requirements. Section 303(a)(1) of the Social Security 
          Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *.
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.

6012 Criteria for Review of State Law Conformity with Federal 
Requirements
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
6013 Claim Determinations Requirements Designed To Meet Department of 
          Labor Criteria
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
the claimant or the employer. In addition to the agency's own records, 
this information may be obtained from the worker, the employer, or other 
sources. If the information obtained in the first instance discloses no 
essential disagreement and provides a sufficient basis for a fair 
determination, no further investigation is necessary. If the information 
obtained from other sources differs essentially from that furnished by 
the claimant, the agency, in order to meet its responsibility, is 
required to inform the claimant of such information from other sources 
and to afford the claimant an opportunity to furnish any further facts 
he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.

[[Page 75]]

    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------

    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it: (1) Results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) There is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
There is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) That claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation

[[Page 76]]

of eligibility and weekly and maximum benefit amounts. (If maximum 
benefits are allowed, it may not be necessary to show details of 
earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determinaton.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly amount plus earnings, whichever is provided by the 
State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits.
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions.
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains: (i) The several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a

[[Page 77]]

written notice of determination upon request; (v) his right to protest, 
request redetermination, or appeal with respect to subsequent weeks for 
which there is a reduction from his benefits for the same reason, and on 
the basis of the same facts even though he does not automatically 
receive a written notice of determination; and (vi) that if the State 
law requires written notice of determination in order to effectuate a 
protest, redetermination, or appeal, he must be so advised and advised 
also that he must request a written notice of determination before he 
takes any such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given with his notice of monetary determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ----------------
------------ (name of pamphlet or booklet) heretofore furnished to 
you.''
6014 Separation Information Requirements Designed To Meet Department of 
          Labor Criteria
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods invovled, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the empolyer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for

[[Page 78]]

the employer to give the worker a copy of the notice sent by the 
employer to the agency.
    B. Information to worker.
    1. Information required to be given. Employees are required to give 
their employers information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to: 
(a) The name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.

6015 Evaluation of Alternative State Provisions with Respect to Claim 
Determinations and Separation Information. If the State law provisions 
do not conform to the suggested requirements set forth in sections 6013 
and 6014, but the State law contains alternative provisions, the Bureau 
of Employment Security, in collaboration with the State agency, will 
study the actual or anticipated effects of the alternative provisions. 
If the Administrator of the Bureau concludes that the alternative 
provisions satisfy the criteria in section 6012, he will so notify the 
State agency. If the Administrator of the Bureau does not so conclude, 
he will submit the matter to the Secretary. If the Secretary concludes 
that the alternative provisions satisfy the criteria in section 6012, 
the State agency will be so notified. If the Secretary concludes that 
there is a question as to whether the alternative provisions satisfy the 
criteria, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, Sec.601.5.

[53 FR 40557, Oct. 17, 1988; 53 FR 43799, Oct. 26, 1988]



    Sec. Appendix C to Part 614--Standard for Fraud and Overpayment 
                                Detection

         Employment Security Manual (Part V, Sections 7510-7515)

7510-7519 Standard for Fraud and Overpayment Detection

7510 Federal Law Requirements. Section 303(a)(1) of the Social Security 
Act requires that a State law include provision for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure for all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * * ''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

7511 The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the claimant or 
others, and (2) to deter claimants from obtaining benefits through 
willful misrepresentation.
7513 Criteria for Review of State Conformity With Federal Requirements. 
In detemining State conformity with the above requirements of the 
Internal Revenue Code and the Social Security Act, as interpreted by the 
Secretary of Labor, the following criteria will be applied:

[[Page 79]]

    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explantaion: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agent for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are commonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan
    A. of investigation based on a sample post-audit will be considered 
as partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated? *
---------------------------------------------------------------------------

    * Revises section 7513 as issued 5/5/50.
---------------------------------------------------------------------------

    Explanation. To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants? *
    Explanation. To meet this criterion, the State agency must issue 
adequate material on claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.

7515 Evalauation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative

[[Page 80]]

methods of administration. If the Bureau concludes that the alternative 
methods satisfy the criteria in section 7513, it will so notify the 
State agency. If the Bureau does not so conclude, it will submit to the 
Secretary the results of the study for his determination of whether the 
State's alternative methods of administration meet the criteria. \*\
---------------------------------------------------------------------------

    \*\ Revises section 7513 as issued 5/5/50.
---------------------------------------------------------------------------



PART 615_EXTENDED BENEFITS IN THE FEDERAL-STATE UNEMPLOYMENT COMPENSATION
PROGRAM--Table of Contents



Sec.
615.1 Purpose.
615.2 Definitions.
615.3 Effective period of the program.
615.4 Eligibility requirements for Extended Benefits.
615.5 Definition of ``exhaustee.''
615.6 Extended Benefits; weekly amount.
615.7 Extended Benefits; maximum amount.
615.8 Provisions of State law applicable to claims.
615.9 Restrictions on entitlement.
615.10 Special provisions for employers.
615.11 Extended Benefit Periods.
615.12 Determination of ``on'' and ``off'' indicators.
615.13 Announcement of the beginning and ending of Extended Benefit 
          Periods.
615.14 Payments to States.
615.15 Records and reports.

    Authority: 26 U.S.C. 7805; 42 U.S.C. 1102; Secretary's Order No. 4-
75 (40 FR 18515).

    Source: 53 FR 27937, July 25, 1988, unless otherwise noted.



Sec.615.1  Purpose.

    The regulations in this part are issued to implement the ``Federal-
State Extended Unemployment Compensation Act of 1970'' as it has been 
amended, which requires, as a condition of tax offset under the Federal 
Unemployment Tax Act (26 U.S.C. 3301 et seq.), that a State unemployment 
compensation law provide for the payment of extended unemployment 
compensation during periods of high unemployment to eligible individuals 
as prescribed in the Act. The benefits provided under State law, in 
accordance with the Act and this part, are hereafter referred to as 
Extended Benefits, and the program is referred to as the Extended 
Benefit Program.



Sec.615.2  Definitions.

    For the purposes of the Act and this part--
    (a) Act means the ``Federal-State Extended Unemployment Compensation 
Act of 1970'' (title II of Pub. L. 91-373; 84 Stat. 695, 708), approved 
August 10, 1970, as amended from time to time, including the 1980 
amendments in section 416 of Pub. L. 96-364 (94 Stat. 1208, 1310), 
approved September 26, 1980, and in sections 1022 and 1024 of Pub. L. 
96-499 (94 Stat. 2599, 2656, 2658) approved December 5, 1980, and the 
1981 amendments in sections 2401 through 2404 and section 2505(b) of 
Pub. L. 97-35 (95 Stat. 357, 874-875, 884) approved August 13, 1981, and 
the 1982 amendment in section 191 of Pub. L. 97-248 (96 Stat. 324, 407) 
approved September 3, 1982, and the 1983 amendment in section 522 of 
Pub. L. 98-21 (97 Stat. 65, 148) approved April 20, 1983.
    (b) Base period means, with respect to an individual, the base 
period as determined under the applicable State law for the individual's 
applicable benefit year.
    (c)(1) Benefit year means, with respect to an individual, the 
benefit year as defined in the applicable State law.
    (2) Applicable benefit year means, with respect to an individual, 
the current benefit year if, at the time an initial claim for Extended 
Benefits is filed, the individual has an unexpired benefit year only in 
the State in which such claim is filed, or, in any other case, the 
individual's most recent benefit year. For this purpose, the most recent 
benefit year for an individual who has unexpired benefit years in more 
than one State when an initial claim for Extended Benefits is filed, is 
the benefit year with the latest ending date or, if such benefit years 
have the same ending date, the benefit year in which the latest 
continued claim for regular compensation was filed. The individual's 
most recent benefit year which expires in an Extended Benefit Period is 
the applicable benefit year if the individual cannot establish a second 
benefit year or is precluded from receiving regular compensation in a 
second benefit year solely by reason of a State law provision which 
meets the requirement of section 3304(a)(7) of the Internal Revenue Code 
of 1986 (26 U.S.C. 3304(a)(7)).

[[Page 81]]

    (d) Compensation and unemployment compensation means cash benefits 
(including dependents' allowances) payable to individuals with respect 
to their unemployment, and includes regular compensation, additional 
compensation and extended compensation as defined in this section.
    (e) Regular compensation means compensation payable to an individual 
under a State law, and, when so payable, includes compensation payable 
pursuant to 5 U.S.C. chapter 85, but does not include extended 
compensation or additional compensation.
    (f) Additional compensation means compensation totally financed by a 
State and payable under a State law by reason of conditions of high 
unemployment or by reason of other special factors and, when so payable, 
includes compensation payable pursuant to 5 U.S.C. chapter 85.
    (g) Extended compensation means the extended unemployment 
compensation payable to an individual for weeks of unemployment which 
begin in an Extended Benefit Period, under those provisions of a State 
law which satisfy the requirements of the Act and this part with respect 
to the payment of extended unemployment compensation, and, when so 
payable, includes compensation payable pursuant to 5 U.S.C. chapter 85, 
but does not include regular compensation or additional compensation. 
Extended compensation is referred to in this part as Extended Benefits.
    (h) Eligibility period means, with respect to an individual, the 
period consisting of--
    (1) The weeks in the individual's applicable benefit year which 
begin in an Extended Benefit Period, or with respect to a single benefit 
year, the weeks in the benefit year which begin in more than one 
Extended Benefit Period, and
    (2) If the applicable benefit year ends within an Extended Benefit 
Period, any weeks thereafter which begin in such Extended Benefit 
Period, but an individual may not have more than one eligibility period 
with respect to any one exhaustion of regular benefits, or carry over 
from one eligibility period to another any entitlement to Extended 
Benefits.
    (i) Sharable compensation means:
    (1) Extended Benefits paid to an eligible individual under those 
provisions of a State law which are consistent with the Act and this 
part, and that does not exceed the smallest of the following:
    (i) 50 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 13 times the individual's weekly amount of Extended Benefits 
payable for a week of total unemployment, as determined pursuant to 
Sec.615.6(a); or
    (iii) 39 times the individual's weekly benefit amount, referred to 
in (ii), reduced by the regular compensation paid (or deemed paid) to 
the individual during the applicable benefit year; and
    (2) Regular compensation paid to an eligible individual with respect 
to weeks of unemployment in the individual's eligibility period, but 
only to the extent that the sum of such compensation, plus the regular 
compensation paid (or deemed paid) to the individual with respect to 
prior weeks of unemployment in the applicable benefit year, exceeds 26 
times and does not exceed 39 times the average weekly benefit amount 
(including allowances for dependents) for weeks of total unemployment 
payable to the individual under the State law in such benefit year: 
Provided, that such regular compensation is paid under provisions of a 
State law which are consistent with the Act and this part.
    (3) Notwithstanding the preceding provisions of this paragraph, 
sharable compensation shall not include any regular or extended 
compensation with respect to which a State is not entitled to a payment 
under section 202(a)(6) or 204 of the Act or Sec.615.14 of this part.
    (j)(1) Secretary means the Secretary of Labor of the United States.
    (2) Department means the United States Department of Labor, and 
shall include the Employment and Training Administration, the agency of 
the United States Department of Labor headed by the Assistant Secretary 
of Labor for Employment and Training to whom has been delegated the 
Secretary's authority under the Act in Secretary's Order No. 4-75 (40 FR 
18515) and Secretary's Order No. 14-75.

[[Page 82]]

    (k)(1) State means the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the U. S. Virgin Islands.
    (2) Applicable State means, with respect to an individual, the State 
with respect to which the individual is an ``exhaustee'' as defined in 
Sec.615.5, and in the case of a combined wage claim for regular 
compensation, the term means the ``paying State'' as defined in Sec.
616.6(e) of this chapter.
    (3) State agency means the State unemployment compensation agency of 
a State which administers the State law.
    (l)(1) State law means the unemployment compensation law of a State, 
approved by the Secretary under section 3304(a) of the Internal Revenue 
Code of 1986 (26 U.S.C. 3304(a)).
    (2) Applicable State law means the law of the State which is the 
applicable State for an individual.
    (m)(1) Week means, for purposes of eligibility for and payment of 
Extended Benefits, a week as defined in the applicable State law.
    (2) Week means, for purposes of computation of Extended Benefit 
``on'' and ``off'' and ``no change'' indicators and insured unemployment 
rates and the beginning and ending of Extended Benefit Periods, a 
calendar week.
    (n)(1) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to the Extended 
Benefit Program as if the individual filing a claim for Extended 
Benefits were filing a claim for regular compensation, except as 
provided in paragraph (n)(2) of this section.
    (2) Week of unemployment in section 202(a)(3)(A) of the Act means a 
week of unemployment, as defined in paragraph (n)(1) of this section, 
for which the individual claims Extended Benefits or sharable regular 
benefits.
    (o) For the purposes of section 202(a)(3) of the Act--
    (1) Employed, for the purposes of section 202(a)(3)(B)(ii) of the 
Act, and employment, for the purposes of section 202(a)(4) of the Act, 
means service performed in an employer-employee relationship as defined 
in the State law; and that law also shall govern whether that service 
must be covered by it, must consist of consecutive weeks, and must 
consist of more weeks of work than are required under section 
202(a)(3)(B) of the Act;
    (2) Individual's capabilities, for the purposes of section 
202(a)(3)(C), means work which the individual has the physical and 
mental capacity to perform and which meets the minimum requirements of 
section 202(a)(3)(D);
    (3) Reasonably short period, for the purposes of section 
202(a)(3)(C), means the number of weeks provided by the applicable State 
law;
    (4) Average weekly benefit amount, for the purposes of section 
202(a)(3)(D)(i), means the weekly benefit amount (including dependents' 
allowances payable for a week of total unemployment and before any 
reduction because of earnings, pensions or other requirements) 
applicable to the week in which the individual failed to take an action 
which results in a disqualification as required by section 202(a)(3)(B) 
of the Act;
    (5) Gross average weekly remuneration, for the purposes of section 
202(a)(3)(D)(i), means the remuneration offered for a week of work 
before any deductions for taxes or other purposes and, in case the 
offered pay may vary from week to week, it shall be determined on the 
basis of recent experience of workers performing work similar to the 
offered work for the employer who offered the work;
    (6) And, as used in section 202(a)(3)(D)(ii), shall be interpreted 
to mean ``or'';
    (7) Provisions of the applicable State law, as used in section 
202(a)(3)(D)(iii), include statutory provisions and decisions based on 
statutory provisions, such as not requiring an individual to take a job 
which requires traveling an unreasonable distance to work, or which 
involves an unreasonable risk to the individual's health, safety or 
morals; and such provisions shall also include labor standards and 
training provisions required under sections 3304(a)(5) and 3304(a)(8) of 
the Internal Revenue Code of 1986 and section 236(e) of the Trade Act of 
1974;
    (8) A systematic and sustained effort, for the purposes of section 
202(a)(3)(E), means--

[[Page 83]]

    (i) A high level of job search activity throughout the given week, 
compatible with the number of employers and employment opportunities in 
the labor market reasonably applicable to the individual,
    (ii) A plan of search for work involving independent efforts on the 
part of each individual which results in contacts with persons who have 
the authority to hire or which follows whatever hiring procedure is 
required by a prospective employer in addition to any search offered by 
organized public and private agencies such as the State employment 
service or union or private placement offices or hiring halls,
    (iii) Actions by the individual comparable to those actions by which 
jobs are being found by people in the community and labor market, but 
not restricted to a single manner of search for work such as registering 
with and reporting to the State employment service and union or private 
placement offices or hiring halls, in the same manner that such work is 
found by people in the community,
    (iv) A search not limited to classes of work or rates of pay to 
which the individual is accustomed or which represent the individual's 
higher skills, and which includes all types of work within the 
individual's physical and mental capabilities, except that the 
individual, while classified by the State agency as provided in Sec.
615.8(d) as having ``good'' job prospects, shall search for work that is 
suitable work under State law provisions which apply to claimants for 
regular compensation (which is not sharable),
    (v) A search by every claimant, without exception for individuals or 
classes of individuals other than those in approved training, as 
required under section 3304(a)(8) of the Internal Revenue Code of 1986 
or section 236(e) of the Trade Act of 1974,
    (vi) A search suspended only when severe weather conditions or other 
calamity forces suspension of such activities by most members of the 
community, except that
    (vii) The individual, while classified by the State agency as 
provided in Sec.615.8(d) as having ``good'' job prospects, if such 
individual normally obtains customary work through a hiring hall, shall 
search for work that is suitable work under State law provisions which 
apply to claimants for regular compensation (which is not sharable);
    (9) Tangible evidence of an active search for work, for the purposes 
of section 202(a)(3)(E), means a written record which can be verified, 
and which includes the actions taken, methods of applying for work, 
types of work sought, dates and places where work was sought, the name 
of the employer or person who was contacted and the outcome of the 
contact;
    (10) Date of a disqualification, as used in section 202(a)(4), means 
the date the disqualification begins, as determined under the applicable 
State law;
    (11) Jury duty, for purposes of section 202(a)(3)(A)(ii), means the 
performance of service as a juror, during all periods of time an 
individual is engaged in such service, in any court of a State or the 
United States pursuant to the law of the State or the United States and 
the rules of the court in which the individual is engaged in the 
performance of such service; and
    (12) Hospitalized for treatment of an emergency or life-threatening 
condition, as used in section 202(a)(3)(A)(ii), has the following 
meaning: ``Hospitalized for treatment'' means an individual was admitted 
to a hospital as an inpatient for medical treatment. Treatment is for an 
``emergency or life threatening condition'' if determined to be such by 
the hospital officials or attending physician that provide the treatment 
for a medical condition existing upon or arising after hospitalization. 
For purposes of this definition, the term ``medical treatment'' refers 
to the application of any remedies which have the objective of effecting 
a cure of the emergency or life-threatening condition. Once an 
``emergency condition'' or a ``life-threatening condition'' has been 
determined to exist by the hospital officials or attending physician, 
the status of the individual as so determined shall remain unchanged 
until release from the hospital.
    (p)(1) Claim filed in any State under the interstate benefit payment 
plan, as used in section 202(c), means any interstate claim for a week 
of unemployment filed pursuant to the Interstate Benefit Payment Plan, 
but does not include--

[[Page 84]]

    (i) A claim filed in Canada,
    (ii) A visiting claim filed by an individual who has received 
permission from his/her regular reporting office to report temporarily 
to a local office in another State and who has been furnished intrastate 
claim forms on which to file claims, or
    (iii) A transient claim filed by an individual who is moving from 
place to place searching for work, or an intrastate claim for Extended 
Benefits filed by an individual who does not reside in a State that is 
in an Extended Benefit Period,
    (2) The first 2 weeks, as used in section 202(c), means the first 
two weeks for which the individual files compensable claims for Extended 
Benefits under the Interstate Benefit Payment Plan in an agent State in 
which an Extended Benefit Period is not in effect during such weeks, and
    (q) Benefit structure as used in section 204(a)(2)(D), for the 
requirement to round down to the ``nearest lower full dollar amount'' 
for Federal reimbursement of sharable regular and sharable extended 
compensation means all of the following:
    (1) Amounts of regular weekly benefit payments,
    (2) Amounts of additional and extended weekly benefit payments,
    (3) The State maximum or minimum weekly benefit,
    (4) Partial and part-total benefit payments,
    (5) Amounts payable after deduction for pensions, and
    (6) Amounts payable after any other deduction required by State law.

[53 FR 27937, July 25, 1988, as amended at 71 FR 35514, June 21, 2006]



Sec.615.3  Effective period of the program.

    An Extended Benefit Program conforming with the Act and this part 
shall be a requirement for a State law effective on and after January 1, 
1972, pursuant to section 3304(a)(11) of the Internal Revenue Code of 
1986, (26 U.S.C. 3304(a)(11)). Continuation of the program by a State in 
conformity and substantial compliance with the Act and this part, 
throughout any 12-month period ending on October 31 of a year subsequent 
to 1972, shall be a condition of the certification of the State with 
respect to such 12-month period under section 3304(c) of the Internal 
Revenue Code of 1986 (26 U.S.C. 3304(c)). Conformity with the Act and 
this part in the payment of regular compensation and Extended Benefits 
to any individual shall be a continuing requirement, applicable to every 
week as a condition of a State's entitlement to payment for any 
compensation as provided in the Act and this part.



Sec.615.4  Eligibility requirements for Extended Benefits.

    (a) General. An individual is entitled to Extended Benefits for a 
week of unemployment which begins in the individual's eligibility period 
if, with respect to such week, the individual is an exhaustee as defined 
in Sec.615.5, files a timely claim for Extended Benefits, and 
satisfies the pertinent requirements of the applicable State law which 
are consistent with the Act and this part.
    (b) Qualifying for Extended Benefits. The State law shall specify 
whether an individual qualifies for Extended Benefits by earnings and 
employment in the base period for the individual's applicable benefit 
year as required by section 202(a)(5) of the Act, (and if it does not 
also apply this requirement to the payment of sharable regular benefits, 
the State will not be entitled to a payment under Sec.615.14), as 
follows:
    (1) One and one-half times the high quarter wages; or
    (2) Forty times the most recent weekly benefit amount, and if this 
alternative is adopted, it shall use the weekly benefit amount 
(including dependents' allowances) payable for a week of total 
unemployment (before any reduction because of earnings, pensions or 
other requirements) which applied to the most recent week of regular 
benefits; or
    (3) Twenty weeks of full-time insured employment, and if this 
alternative is adopted, the term ``full-time'' shall have the meaning 
provided by the State law.



Sec.615.5  Definition of ``exhaustee.''

    (a)(1) ``Exhaustee'' means an individual who, with respect to any 
week

[[Page 85]]

of unemployment in the individual's eligibility period:
    (i) Has received, prior to such week, all of the regular 
compensation that was payable under the applicable State law or any 
other State law (including regular compensation payable to Federal 
civilian employees and Ex-Servicemembers under 5 U.S.C. chapter 85) for 
the applicable benefit year that includes such week; or
    (ii) Has received, prior to such week, all of the regular 
compensation that was available under the applicable State law or any 
other State law (including regular compensation available to Federal 
civilian employees and Ex-Servicemembers under 5 U.S.C. chapter 85) in 
the benefit year that includes such week, after the cancellation of some 
or all of the individual's wage credits or the total or partial 
reduction of the individual's right to regular compensation; or
    (iii) The applicable benefit year having expired prior to such week 
and the individual is precluded from establishing a second (new) benefit 
year, or the individual established a second benefit year but is 
suspended indefinitely from receiving regular compensation, solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(7)): 
Provided, that, an individual shall not be entitled to Extended Benefits 
based on regular compensation in a second benefit year during which the 
individual is precluded from receiving regular compensation solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(7)); 
or
    (iv) The applicable benefit year having expired prior to such week, 
the individual has insufficient wages or employment, or both, on the 
basis of which a new benefit year could be established in any State that 
would include such week; and
    (v) Has no right to unemployment compensation for such week under 
the Railroad Unemployment Insurance Act or such other Federal laws as 
are specified by the Department pursuant to this paragraph; and
    (vi) Has not received and is not seeking for such week unemployment 
compensation under the unemployment compensation law of Canada, unless 
the Canadian agency finally determines that the individual is not 
entitled to unemployment compensation under the Canadian law for such 
week.
    (2) An individual who becomes an exhaustee as defined above shall 
cease to be an exhaustee commencing with the first week that the 
individual becomes eligible for regular compensation under any State law 
or 5 U.S.C. chapter 85, or has any right to unemployment compensation as 
provided in paragraph (a)(1)(v) of this section, or has received or is 
seeking unemployment compensation as provided in paragraph (a)(1)(vi) of 
this section. The individual's Extended Benefit Account shall be 
terminated upon the occurrence of any such week, and the individual 
shall have no further right to any balance in that Extended Benefit 
Account.
    (b) Special Rules. For the purposes of paragraphs (a)(1)(i) and 
(a)(1)(ii) of this section, an individual shall be deemed to have 
received in the applicable benefit year all of the regular compensation 
payable according to the monetary determination, or available to the 
individual, as the case may be, even though--
    (1) As a result of a pending appeal with respect to wages or 
employment or both that were not included in the original monetary 
determination with respect to such benefit year, the individual may 
subsequently be determined to be entitled to more or less regular 
compensation, or
    (2) By reason of a provision in the State law that establishes the 
weeks of the year in which regular compensation may be paid to the 
individual on the basis of wages in seasonal employment--
    (i) The individual may be entitled to regular compensation with 
respect to future weeks of unemployment in the next season or off 
season, as the case may be, but such compensation is not payable with 
respect to the week of unemployment for which Extended Benefits are 
claimed, and
    (ii) The individual is otherwise an exhaustee within the meaning of 
this

[[Page 86]]

section with respect to rights to regular compensation during the season 
or off season in which that week of unemployment occurs, or
    (3) Having established a benefit year, no regular compensation is 
payable during such year because wage credits were cancelled or the 
right to regular compensation was totally reduced as the result of the 
application of a disqualification.
    (c) Adjustment of week. If it is subsequently determined as the 
result of a redetermination or appeal that an individual is an exhaustee 
as of a different week than was previously determined, the individual's 
rights to Extended Benefits shall be adjusted so as to accord with such 
redetermination or decision.

[53 FR 27937, July 25, 1988, as amended at 71 FR 35514, June 21, 2006]



Sec.615.6  Extended Benefits; weekly amount.

    (a) Total unemployment. (1) The weekly amount of Extended Benefits 
payable to an individual for a week of total unemployment in the 
individual's eligibility period shall be the amount of regular 
compensation payable to the individual for a week of total unemployment 
during the applicable benefit year. If the individual had more than one 
weekly amount of regular compensation for total unemployment during such 
benefit year, the weekly amount of extended compensation for total 
unemployment shall be one of the following which applies as specified in 
the applicable State law:
    (i) The average of such weekly amounts of regular compensation,
    (ii) The last weekly benefit amount of regular compensation in such 
benefit year, or
    (iii) An amount that is reasonably representative of the weekly 
amounts of regular compensation payable during such benefit year.
    (2) If the method in paragraph (a)(1)(iii) of this section is 
adopted by a State, the State law shall specify how such amount is to be 
computed. If the method in paragraph (a)(1)(i) of this section is 
adopted by a State, and the amount computed is not an even dollar 
amount, the amount shall be raised or lowered to an even dollar amount 
as provided by the applicable State law for regular compensation.
    (b) Partial and part-total unemployment. The weekly amount of 
Extended Benefits payable for a week of partial or part-total 
unemployment shall be determined under the provisions of the applicable 
State law which apply to regular compensation, computed on the basis of 
the weekly amount of Extended Benefits payable for a week of total 
unemployment as determined pursuant to paragraph (a) of this section.



Sec.615.7  Extended Benefits; maximum amount.

    (a) Individual account. An Extended Benefit Account shall be 
established for each individual determined to be eligible for Extended 
Benefits, in the sum of the maximum amount potentially payable to the 
individual as computed in accordance with paragraph (b) of this section.
    (b) Computation of amount in individual account. (1) The amount 
established in the Extended Benefit Account of an individual, as the 
maximum amount potentially payable to the individual during the 
individual's eligibility period, shall be equal to the lesser of--
    (i) 50 percent of the total amount of regular compensation 
(including dependents' allowances) payable to the individual during the 
individual's applicable benefit year; or
    (ii) 13 times the individual's weekly amount of Extended Benefits 
payable for a week of total unemployment, as determined pursuant to 
Sec.615.6(a); or
    (iii) 39 times the individual's weekly benefit amount referred to in 
(ii), reduced by the regular compensation paid (or deemed paid) to the 
individual during the individual's applicable benefit year.
    (2) If the State law so provides, the amount in the individual's 
Extended Benefit Account shall be reduced by the aggregate amount of 
additional compensation paid (or deemed paid) to the individual under 
such law for prior weeks of unemployment in such benefit year which did 
not begin in an Extended Benefit Period.

[[Page 87]]

    (c) Changes in accounts. (1) If an individual is entitled to more or 
less Extended Benefits as a result of a redetermination or an appeal 
which awarded more or less regular compensation or Extended Benefits, an 
appropriate change shall be made in the individual's Extended Benefit 
Account pursuant to an amended determination of the individual's 
entitlement to Extended Benefits.
    (2) If an individual who has received Extended Benefits for a week 
of unemployment is determined to be entitled to more regular 
compensation with respect to such week as the result of a 
redetermination or an appeal, the Extended Benefits paid shall be 
treated as if they were regular compensation up to the greater amount to 
which the individual has been determined to be entitled, and the State 
agency shall make appropriate adjustments between the regular and 
extended accounts. If the individual is entitled to more Extended 
Benefits as a result of being entitled to more regular compensation, an 
amended determination shall be made of the individual's entitlement to 
Extended Benefits. If the greater amount of regular compensation results 
in an increased duration of regular compensation, the individual's 
status as an exhaustee shall be redetermined as of the new date of 
exhaustion of regular compensation.
    (3) If an individual who has received Extended Benefits for a week 
of unemployment is determined to be entitled to less regular 
compensation as the result of a redetermination or an appeal, and as a 
consequence is entitled to less Extended Benefits, any Extended Benefits 
paid in excess of the amount to which the individual is determined to be 
entitled after the redetermination or decision on appeal shall be 
considered an overpayment which the individual shall have to repay on 
the same basis and in the same manner that excess payments of regular 
compensation are required to be repaid under the applicable State law. 
If such decision reduces the duration of regular compensation payable to 
the individual, the claim for Extended Benefits shall be backdated to 
the earliest date, subsequent to the date when the redetermined regular 
compensation was exhausted and within the individual's eligibility 
period, that the individual was eligible to file a claim for Extended 
Benefits. Any such changes shall be made pursuant to an amended 
determination of the individual's entitlement to Extended Benefits.
    (d) Reduction because of trade readjustment allowances. Section 
233(d) of the Trade Act of 1974 (and section 204(a)(2)(C) of the Act), 
requiring a reduction of Extended Benefits because of the receipt of 
trade readjustment allowances, shall be applied as follows:
    (1) The reduction of Extended Benefits shall apply only to an 
individual who has not exhausted his/her Extended Benefits at the end of 
the benefit year;
    (2) The amount to be deducted is the product of the weekly benefit 
amount for Extended Benefits multiplied by the number of weeks for which 
trade readjustment allowances were paid (regardless of the amount paid 
for any such week) up to the close of the last week that begins in the 
benefit year; and
    (3) The amount to be deducted shall be deducted from the balance of 
Extended Benefits not used as of the close of the last week which begins 
in the benefit year.



Sec.615.8  Provisions of State law applicable to claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part, the terms 
and conditions of the applicable State law which apply to claims for, 
and the payment of, regular compensation shall apply to claims for, and 
the payment of, Extended Benefits. The provisions of the applicable 
State law which shall apply to claims for, and the payment of, Extended 
Benefits include, but are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals and employers, as appropriate;
    (4) Determinations, redeterminations, and appeal and review;
    (5) Ability to work and availability for work, except as provided 
otherwise in this section;

[[Page 88]]

    (6) Disqualifications, including disqualifying income provisions, 
except as provided by paragraph (c) of this section;
    (7) Overpayments, and the recovery thereof;
    (8) Administrative and criminal penalties;
    (9) The Interstate Benefit Payment Plan;
    (10) The Interstate Arrangement for Combining Employment and Wages, 
in accordance with part 616 of this chapter.
    (b) Provisions not to be applicable. The State law and regulations 
shall specify those of its terms and conditions which shall not be 
applicable to claims for, or payment of, Extended Benefits. Among such 
terms and conditions shall be at least those relating to--
    (1) Any waiting period;
    (2) Monetary or other qualifying requirements, except as provided in 
Sec.615.4(b); and
    (3) Computation of weekly and total regular compensation.
    (c) Terminating disqualifications. A disqualification in a State 
law, as to any individual who voluntarily left work, was suspended or 
discharged for misconduct, gross misconduct or the commission or 
conviction of a crime, or refused an offer of or a referral to work, as 
provided in sections 202(a) (4) and (6) of the Act--
    (1) As applied to regular benefits which are not sharable, is not 
subject to any limitation in sections 202(a) (4) and (6);
    (2) As applied to eligibility for Extended Benefits, shall require 
that the individual be employed again subsequent to the date of the 
disqualification before it may be terminated, even though it may have 
been terminated on other grounds for regular benefits which are not 
sharable; and if the State law does not also apply this provision to the 
payment of what would otherwise be sharable regular benefits, the State 
will not be entitled to a payment under the Act and Sec.615.14 in 
regard to such regular compensation; and
    (3) Will not apply in regard to eligibility for Extended Benefits in 
a subsequent eligibility period.
    (d) Classification and determination of job prospects. (1) As to 
each individual who files an initial claim for Extended Benefits (or 
sharable regular compensation), the State agency shall classify the 
individual's prospects for obtaining work in his/her customary 
occupation within a reasonably short period, as ``good'' or ``not 
good,'' and shall promptly (not later than the end of the week in which 
the initial claim is filed) notify the individual in writing of such 
classification and of the requirements applicable to the individual 
under the provisions of the applicable State law corresponding to 
section 202(a)(3) of the Act and this part. Such requirements shall be 
applicable beginning with the week following the week in which the 
individual is furnished such written notice.
    (2) If an individual is thus classified as having good prospects, 
but those prospects are not realized by the close of the period the 
State law specifies as a reasonably short period, the individual's 
prospects will be automatically reclassified as ``not good'' or 
classified as ``good'' or ``not good'' depending on the individual's job 
prospects as of that date.
    (3) Whenever, as part of a determination of an individual's 
eligibility for benefits, an issue arises concerning the individual's 
failure to apply for or accept an offer of work (sections 
202(a)(3)(A)(i) and (F) of the Act and paragraphs (e) and (f) of this 
section), or to actively engage in seeking work (sections 
202(a)(3)(A)(ii) and (E) of the Act and paragraph (g) of this section), 
a written appealable determination shall be made which includes a 
finding as to the individual's job prospects at the time the issue 
arose. The reasons for allowing or denying benefits in the written 
notice of determination shall explain how the individual's job prospects 
relate to the decision to allow or deny benefits.
    (4) If an individual's job prospects are determined in accordance 
with the preceding paragraph (3) to be ``good,'' the suitability of work 
will be determined under the standard State law provisions applicable to 
claimants for regular compensation which is not sharable; and if 
determined to be ``not good,'' the suitability of work will be 
determined under the definition of

[[Page 89]]

suitable work in the State law provisions corresponding to sections 
202(a)(3) (C) and (D) of the Act and this part. Any determination or 
classification of an individual's job prospects is mutually exclusive, 
and only one suitable work definition shall be applied to a claimant as 
to any failure to accept or apply for work or seek work with respect to 
any week.
    (e) Requirement of referral to work. (1) The State law shall 
provide, as required by section 202(a)(3)(F) of the Act and this part, 
that the State Workforce Agency shall refer every claimant for Extended 
Benefits to work which is ``suitable work'' as provided in paragraph 
(d)(4) of this section, beginning with the week following the week in 
which the individual is furnished a written notice of classification of 
job prospects as required by paragraphs (d)(1) and (h) of this section.
    (2) To make such referrals, the State Workforce Agency shall assure 
that each Extended Benefit claimant is registered for work and continues 
to be considered for referral to job openings as long as he/she 
continues to claim benefits.
    (3) In referring claimants to available job openings, the State 
Workforce Agency shall apply to Extended Benefit claimants the same 
priorities, policies, and judgments as it does to other applicants, 
except that it shall not restrict referrals only to work at higher skill 
levels, prior rates of pay, customary work, or preferences as to work or 
pay for individuals whose prospects of obtaining work in their customary 
occupations have been classified as or determined to be ``not good.''
    (4) For referral purposes, any work which does not exceed the 
individual's capabilities shall be considered suitable work for an 
Extended Benefit claimant whose job prospects have been classified as or 
determined to be ``not good'', except as modified by this paragraph (e).
    (5) For Extended Benefit claimants whose prospects of obtaining work 
in their customary occupations have been classified as or determined to 
be ``not good'', work shall not be suitable, and referral to a job shall 
not be made, if--
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment benefits (SUB) (as defined in section 
501(c)(17)(D) of the Internal Revenue Code of 1986) payable to the 
individual,
    (ii) The work is not offered in writing or is not listed with the 
State employment service,
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, without regard 
to any exemption, or any applicable State or local minimum wage, or
    (iv) Failure to accept or apply for the work would not result in a 
denial of compensation under the provisions of the applicable State law 
as defined in Sec.615.2(o)(7).
    (6) In addition, if the State Workforce Agency classifies or 
determines that an individual's prospects for obtaining work in his/her 
customary occupation within a reasonably short period are ``good,'' 
referral shall not be made to a job if such referral would not be made 
under the State law provisions applicable to claimants for regular 
benefits which are not sharable, and such referrals shall be limited to 
work which the individual is required to make a ``systematic and 
sustained effort'' to search for as defined in Sec.615.2(o)(8).
    (7) For the purposes of the foregoing paragraphs of this paragraph 
(e), State law applies regarding whether members of labor organizations 
shall be referred to nonunion work in their customary occupations.
    (8) If the State law does not also apply this paragraph (e) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec.615.14 in regard to such regular compensation.
    (f) Refusal of work. (1) The State law shall provide, as required by 
section 202(a)(3)(A)(i) of the Act and this part, that if an individual 
who claims Extended Benefits fails to accept an offer of work or fails 
to apply for work to which he/she was referred by the State Workforce 
Agency--
    (i) If the individual's prospects for obtaining work in his/her 
customary occupation within a reasonably short

[[Page 90]]

period are determined to be ``good,'' the State agency shall determine 
whether the work is suitable under the standard State law provisions 
which apply to claimants for regular compensation which is not sharable, 
and if determined to be suitable the individual shall be ineligible for 
Extended Benefits for the week in which the individual fails to apply 
for or accept an offer of suitable work and thereafter until the 
individual is employed in at least four weeks with wages from such 
employment totalling not less than four times the individual's weekly 
benefit amount, as provided by the applicable State law; or
    (ii) If the individual's prospects for obtaining work in his/her 
customary occupation are determined to be ``not good,'' the State agency 
shall determine whether the work is suitable under the applicable State 
law provisions corresponding to sections 202(a)(3) (C) and (D) of the 
Act and paragraphs (e)(5) and (f)(2) of this section, and if determined 
to be suitable the individual shall be ineligible for Extended Benefits 
for the week in which the individual fails to apply for or accept an 
offer of suitable work and thereafter until the individual is employed 
in at least four weeks with wages from such employment totalling not 
less than four times the individual's weekly benefit amount, as provided 
by the applicable State law.
    (2) For an individual whose prospects of obtaining work in his/her 
customary occupation within the period specified by State law are 
classified or determined to be ``not good,'' the term ``suitable work'' 
shall mean any work which is within the individual's capabilities, 
except that work shall not be suitable if--
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment benefits (SUB) (as defined in section 
501(c)(17)(D) of the Internal Revenue Code of 1986) payable to the 
individual,
    (ii) The work is not offered in writing or is not listed with the 
State employment service,
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, without regard 
to any exemption, or any applicable State or local minimum wage, or
    (iv) Failure to accept or apply for the work would not result in a 
denial of compensation under the provisions of the applicable State law 
as defined in Sec.615.2(o)(7).
    (3) For the purposes of the foregoing paragraphs of this paragraph 
(f), State law applies regarding whether members of labor organizations 
shall be referred to nonunion work in their customary occupations.
    (4) If the State law does not also apply this paragraph (f) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec.615.14 in regard to such regular compensation.
    (g) Actively seeking work. (1) The State law shall provide, as 
required by sections 202(a)(3) (A)(ii) and (E) of the Act and this part, 
that an individual who claims Extended Benefits shall be required to 
make a systematic and sustained effort (as defined in Sec.615.2(o)(8)) 
to search for work which is ``suitable work'' as provided in paragraph 
(d)(4) of this section, throughout each week beginning with the week 
following the week in which the individual is furnished a written notice 
of classification of job prospects as required by paragraphs (d)(1) and 
(h) of this section, and to furnish to the State agency with each claim 
tangible evidence of such efforts.
    (2) If the individual fails to thus search for work, or to furnish 
tangible evidence of such efforts, he/she shall be ineligible for 
Extended Benefits for the week in which the failure occurred and 
thereafter until the individual is employed in at least four weeks with 
wages from such employment totalling not less than four times the 
individual's weekly benefit amount, as provided by the applicable State 
law.
    (3)(i) A State law may provide that eligibility for Extended 
Benefits be determined under the applicable provisions of State law for 
regular compensation which is not sharable, without regard to the active 
search provisions otherwise applicable in paragraph (g)(1) of this 
section, for any individual

[[Page 91]]

who fails to engage in a systematic and sustained search for work 
throughout any week because such individual is--
    (A) Serving on jury duty, or
    (B) Hospitalized for treatment of an emergency or life-threatening 
condition.
    (ii) The conditions in (i) (A) and (B) must be applied to 
individuals filing claims for Extended Benefits in the same manner as 
applied to individuals filing claims for regular compensation which is 
not sharable compensation.
    (4) For the purposes of the foregoing paragraphs of this paragraph 
(g), State law applies regarding whether members of labor organizations 
shall be required to seek nonunion work in their customary occupations.
    (5) If the State law does not also apply this paragraph (g) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec.615.14 in regard to such regular compensation.
    (h) Information to claimants. The State agency or State Workforce 
Agency, as applicable, shall assure that each Extended Benefit claimant 
(and claimant for sharable regular compensation) is informed in 
writing--
    (1) Of the State agency's classification of his/her prospects for 
finding work in his/her customary occupation within the time set out in 
paragraph (d) as ``good'' or ``not good,''
    (2) What kind of jobs he/she may be referred to, depending on the 
classification of his/her job prospects,
    (3) What kind of jobs he/she must be actively engaged in seeking 
each week depending on the classification of his/her job prospects, and 
what tangible evidence of such search must be furnished to the State 
agency with each claim for benefits, and
    (4) The resulting disqualification if he/she fails to apply for work 
to which referred, or fails to accept work offered, or fails to actively 
engage in seeking work or to furnish tangible evidence of such search 
for each week for which Extended Benefits or sharable regular benefits 
are claimed, beginning with the week following the week in which such 
information is furnished in writing to the individual.

[53 FR 27937, July 25, 1988, as amended at 71 FR 35514, June 21, 2006]



Sec.615.9  Restrictions on entitlement.

    (a) Disqualifications. If the week of unemployment for which an 
individual claims Extended Benefits is a week to which a 
disqualification for regular compensation applies, including a reduction 
because of the receipt of disqualifying income, or would apply but for 
the fact that the individual has exhausted all rights to such 
compensation, the individual shall be disqualified in the same degree 
from receipt of Extended Benefits for that week.
    (b) Additional compensation. No individual shall be paid additional 
compensation and Extended Benefits with respect to the same week. If 
both are payable by a State with respect to the same week, the State law 
may provide for the payment of Extended Benefits instead of additional 
compensation with respect to the week. If Extended Benefits are payable 
to an individual by one State and additional compensation is payable to 
the individual for the same week by another State, the individual may 
elect which of the two types of compensation to claim.
    (c) Interstate claims. An individual who files claims for Extended 
Benefits under the Interstate Benefit Payment Plan, in a State which is 
not in an Extended Benefit Period for the week(s) for which Extended 
Benefits are claimed, shall not be paid more than the first two weeks 
for which he/she files such claims.
    (d) Other restrictions. The restrictions on entitlement specified in 
this section are in addition to other restrictions in the Act and this 
part on eligibility for and entitlement to Extended Benefits.



Sec.615.10  Special provisions for employers.

    (a) Charging contributing employers. (1) Section 3303(a)(1) of the 
Internal Revenue Code of 1986 (26 U.S.C. 3303(a)(1)) does not require 
that Extended Benefits paid to an individual be charged to the 
experience rating accounts of employers.

[[Page 92]]

    (2) A State law may, however, consistently with section 3303(a)(1), 
require the charging of Extended Benefits paid to an individual; and if 
it does, it may provide for charging all or any portion of such 
compensation paid.
    (3) Sharable regular compensation must be charged as all other 
regular compensation is charged under the State law.
    (b) Payments by reimbursing employers. If an employer is reimbursing 
the State unemployment fund in lieu of paying contributions pursuant to 
the requirements of State law conforming with sections 3304(a)(6)(B) and 
3309(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(6)(B) 
and 3309(a)(2)), the State law shall require the employer to reimburse 
the State unemployment fund for not less than 50 percent of any sharable 
compensation that is attributable under the State law to service with 
such employer; and as to any compensation which is not sharable 
compensation under Sec.615.14, the State law shall require the 
employer to reimburse the State unemployment fund for 100 percent, 
instead of 50 percent, of any such compensation paid.



Sec.615.11  Extended Benefit Periods.

    (a) Beginning date. Except as provided in paragraph (d) of this 
section, an Extended Benefit Period shall begin in a State on the first 
day of the third calendar week after a week for which there is a State 
``on'' indicator in that State.
    (b) Ending date. Except as provided in paragraph (c) of this 
section, an Extended Benefit Period in a State shall end on the last day 
of the third week after the first week for which there is a State 
``off'' indicator in that State.
    (c) Duration. An Extended Benefit Period which becomes effective in 
any State shall continue in effect for not less than 13 consecutive 
weeks.
    (d) Limitation. No Extended Benefit Period may begin in any State by 
reason of a State ``on'' indicator before the 14th week after the ending 
of a Prior Extended Benefit Period with respect to such State.



Sec.615.12  Determination of ``on'' and ``off'' indicators.

    (a) Standard State indicators. (1) There is a State ``on'' indicator 
in a State for a week if the head of the State agency determines, in 
accordance with this section, that, for the period consisting of that 
week and the immediately preceding 12 weeks, the rate of insured 
unemployment (not seasonally adjusted) under the State law--
    (i) Equalled or exceeded 120 percent of the average of such rates 
for the corresponding 13-week periods ending in each of the preceding 
two calendar years, and
    (ii) Equalled or exceeded 5.0 percent.
    (2) There is a State ``off'' indicator in a State for a week if the 
head of the State agency determines, in accordance with this section, 
that, for the period consisting of that week and the immediately 
preceding 12 weeks, the rate of insured unemployment (not seasonally 
adjusted) under the State law--
    (i) Was less than 120 percent of the average of such rates for the 
corresponding 13 week periods ending in each of the preceding two 
calendar years, or
    (ii) Was less than 5.0 percent.
    (3) The standard State indicators in this paragraph (a) shall apply 
to weeks beginning after September 25, 1982.
    (b) Optional State indicators. (1)(i) A State may, in addition to 
the State indicators in paragraph (a) of this section, provide by its 
law that there shall be a State ``on'' indicator in the State for a week 
if the head of the State agency determines, in accordance with this 
section, that, for the period consisting of that week and the 
immediately preceding 12 weeks, the rate of insured unemployment (not 
seasonally adjusted) under the State law equalled or exceeded 6.0 
percent even though it did not meet the 120 percent factor required 
under paragraph (a).
    (ii) A State which adopts the optional State indicator must also 
provide that, when it is in an Extended Benefit Period, there will not 
be an ``off'' indicator until (A) the State rate of insured unemployment 
is less than 6.0 percent, and (B) either its rate of insured 
unemployment is less than 5.0 percent or is less than 120 percent of

[[Page 93]]

the average of such rates for the corresponding 13-week periods ending 
in each of the preceding two calendar years.
    (2) The optional State indicators in this paragraph (b) shall apply 
to weeks beginning after September 25, 1982.
    (c) Computation of rate of insured unemployment--(1) Equation. Each 
week the State agency head shall calculate the rate of insured 
unemployment under the State law (not seasonally adjusted) for purposes 
of determining the State ``on'' and ``off'' and ``no change'' 
indicators. In making such calculations the State agency head shall use 
a fraction, the numerator of which shall be the weekly average number of 
weeks claimed in claims filed (not seasonally adjusted) in the State in 
the 13-week period ending with the week for which the determination is 
made, and the denominator of which shall be the average monthly 
employment covered by the State law for the first four of the last six 
calendar quarters ending before the close of the 13-week period. The 
quotient obtained is to be computed to four decimal places, and is not 
otherwise rounded, and is to be expressed as a percentage by multiplying 
the resultant decimal fraction by 100.
    (2) Counting weeks claimed. To determine the average number of weeks 
claimed in claims filed to serve as the numerator under paragraph 
(c)(1), the State agency shall include claims for all weeks for regular 
compensation, including claims taken as agent State under the Interstate 
Benefit Payment Plan. It shall exclude claims--
    (i) For Extended Benefits under any State law,
    (ii) For additional compensation under any State law, and
    (iii) Under any Federal law except joint claims which combine 
regular compensation and compensation payable under 5 U.S.C. chapter 85.
    (3) Method of computing the State 120 percent factor. The rate of 
insured unemployment for a current 13-week period shall be divided by 
the average of the rates of insured unemployment for the corresponding 
13-week periods in each of the two preceding calendar years to determine 
whether the rate is equal to 120 percent of the average rate for the two 
years. The quotient obtained shall be computed to four decimal places 
and not otherwise rounded, and shall be expressed as a percentage by 
multiplying the resultant decimal fraction by 100. The average of the 
rates for the corresponding 13-week periods in each of the two preceding 
calendar years shall be one-half the sum of such rates computed to four 
decimal places and not otherwise rounded. To determine which are the 
corresponding weeks in the preceding years--
    (i) The weeks shall be numbered starting with week number 1 as the 
first week ending in each calendar year.
    (ii) The 13-week period ending with any numbered week in the current 
year shall correspond to the period ending with that same numbered week 
in each preceding year.
    (iii) When that period in the current year ends with week number 53, 
the corresponding period in preceding years shall end with week number 
52 if there is no week number 53.
    (d) Amendment of State indicator rates. (1) Because figures used for 
determinations under this section may contain errors and because it is 
not practical to apply any correction in a State ``on'' or ``off'' or 
``no change'' indicator retroactively either to recover amounts paid or 
to adjudicate claims for past periods in which claimants failed to make 
the required active search for work, any determination by the head of a 
State agency of an ``on'' or ``off'' or ``no change'' indicator shall 
not be corrected more than three weeks after the close of the week to 
which it applies. If any figure used in the computation of a rate of 
insured unemployment is later found to be wrong, the correct figure 
shall be used to redetermine the rate of insured unemployment and of the 
120 percent factor for that week and all subsequent weeks, but no 
determination of previous ``on'' or ``off'' or ``no change'' indicator 
shall be affected unless the redetermination is made within the time the 
indicator may be corrected under the first sentence of this paragraph 
(d)(1). Any change hereunder shall be subject to the concurrence of the 
Department as provided in paragraph (e) of this section.
    (2) Any determination of the rate of insured unemployment and its 
effect

[[Page 94]]

on an ``on'' or ``off'' or ``no change'' indicator may be challenged by 
appeal or by other proceedings, as shall be provided by State law, but 
the implementation of any change in the indicator from one week to 
another shall not be stayed or postponed. In a hearing on any such 
challenge the issue may be limited to the accuracy of the determination 
of the rate of insured unemployment. If an error in that rate affecting 
the ``on'' or ``off'' or ``no change'' indicator is discovered in such a 
hearing or other proceeding, its retroactive effect shall be limited as 
provided in paragraph (d)(1).
    (e) Notice to Secretary. Within 10 calendar days after the end of 
any week with respect to which the head of a State agency has determined 
that there is an ``on,'' or ``off,'' or ``no change'' indicator in the 
State, the head of the State agency shall notify the Department of the 
determination. The notice shall state clearly the State agency head's 
determination of the specific week for which there is a State ``on'' or 
``off'' or ``no change'' indicator. The notice shall include also the 
State agency head's findings supporting the determination, with a 
certification that the findings are made in accordance with the 
requirements of this Sec.615.15. Determinations and findings made as 
provided in this section shall be accepted by the Department, but the 
head of the State agency shall comply with such provisions as the 
Department may find necessary to assure the correctness and verification 
of notices given under this paragraph. A notice shall not become final 
for purposes of the Act and this part until such notice is accepted by 
the Department.



Sec.615.13  Announcement of the beginning and ending of Extended Benefit Periods.

    (a) State indicators. Upon receipt of the notice required by Sec.
615.12(e) which is acceptable to the Department, the Department shall 
publish in the Federal Register a notice of the State agency head's 
determination that there is an ``on'' or an ``off'' indicator in the 
State, as the case may be, the name of the State and the beginning or 
ending of the Extended Benefit Period, whichever is appropriate. The 
Department shall also notify appropriate news media, the heads of all 
other State agencies, and the Regional Administrators of the Employment 
and Training Administration of the State agency head's determination of 
such State ``on'' or ``off'' indicator and of its effect.
    (b) Publicity by State. Whenever a State agency head determines that 
there is an ``on'' indicator in the State by reason of which an Extended 
Benefit Period will begin in the State, or an ``off'' indicator by 
reason of which an Extended Benefit Period in the State will end, the 
head of the State agency shall promptly announce the determination 
through appropriate news media in the State and notify the Department in 
accordance with Sec.615.12(e). Such announcement shall include the 
beginning or ending date of the Extended Benefit Period, whichever is 
appropriate. In the case of an Extended Benefit Period that is about to 
begin, the announcement shall describe clearly the unemployed 
individuals who may be eligible for Extended Benefits during the period, 
and in the case of an Extended Benefit Period that is about to end, the 
announcement shall also describe clearly the individuals whose 
entitlement to Extended Benefits will be terminated.
    (c) Notices to individuals. (1) Whenever there has been a 
determination that an Extended Benefit Period will begin in a State, the 
State agency shall provide prompt written notice of potential 
entitlement to Extended Benefits to each individual who has established 
a benefit year in the State that will not end prior to the beginning of 
the Extended Benefit Period, and who exhausted all rights under the 
State law to regular compensation before the beginning of the Extended 
Benefit Period.
    (2) The State agency shall provide such notice promptly to each 
individual who begins to claim sharable regular benefits or who exhausts 
all rights under the State law to regular compensation during an 
Extended Benefit Period, including exhaustion by reason of the 
expiration of the individual's benefit year.
    (3) The notices required by paragraphs (c) (1) and (2) of this 
section shall describe those actions required of

[[Page 95]]

claimants for sharable regular compensation and Extended Benefits and 
those disqualifications which apply to such benefits which are different 
from those applicable to other claimants for regular compensation which 
is not sharable.
    (4) Whenever there has been a determination that an Extended Benefit 
Period will end in a State, the State agency shall provide prompt 
written notice to each individual who is currently filing claims for 
Extended Benefits of the forthcoming end of the Extended Benefit Period 
and its effect on the individual's right to Extended Benefits.



Sec.615.14  Payments to States.

    (a) Sharable compensation. (1) The Department shall promptly upon 
receipt of a State's report of its expenditures for a calendar month 
reimburse the State in the amount of the sharable compensation the State 
is entitled to receive under the Act and this part.
    (2) The Department may instead advance to a State for any period not 
greater than one day the amount the Department estimates the State will 
be entitled to be paid under the Act and this part for that period.
    (3) Any payment to a State under this section shall be based upon 
the Department's determination of the amount the State is entitled to be 
paid under the Act and this part, and such amount shall be reduced or 
increased, as the case may be, by any amount by which the Department 
finds that a previous payment was greater or less than the amount that 
should have been paid to the State.
    (4) Any payment to a State pursuant to this paragraph (a) shall be 
made by a transfer from the extended unemployment compensation account 
in the Unemployment Trust Fund to the account of the State in such Fund, 
in accordance with section 204(e) of the Act.
    (b) Payments not to be made to States. Because a State law must 
contain provisions fully consistent with sections 202 and 203 of the 
Act, the Department shall make no payment under paragraph (a) of this 
section, whether or not the State is certified under section 3304(c) of 
the Internal Revenue Code of 1986--
    (1) In respect of any regular or extended compensation paid to any 
individual for any week if the State does not apply--
    (i) The provisions of the State law required by section 202(a)(3) 
and this part, relating to failure to accept work offered or to apply 
for work or to actively engage in seeking work or the provisions of 
State law required by section 202(a)(4) and this part, relating to 
terminating a disqualification;
    (ii) The provisions of the State law required by section 202(a)(5) 
and this part, relating to qualifying employment; or
    (2) In respect of any regular or extended compensation paid to any 
individual for any week which was not payable by reason of the provision 
of the State law required by section 202(c) and this part as determined 
by the Department with regard to each State.
    (c) Payments not to be reimbursed. The Department shall make no 
payment under paragraph (a) of this section, whether or not the State is 
certified under section 3304(c) of the Internal Revenue Code of 1986, in 
respect of any regular or extended compensation paid under a State law--
    (1) As provided in section 204(a)(1) of the Act and this part, if 
the payment made was not sharable extended compensation or sharable 
regular compensation;
    (2) As provided in section 204(a)(2)(A) of the Act, if the State is 
entitled to reimbursement for the payment under the provisions of any 
Federal law other than the Act;
    (3) As provided in section 204(a)(2)(B) of the Act, if for the first 
week in an individual's eligibility period with respect to which 
Extended Benefits or sharable regular benefits are paid to the 
individual and the State law provides for the payment (at any time or 
under any circumstances) of regular compensation to any individual for 
the first week of unemployment in any such individual's benefit year; 
except that--
    (i) In the case of a State law which is changed so that regular 
compensation is not paid at any time or under any circumstances with 
respect to the first week of unemployment in any individual's benefit 
year, this paragraph (c)(3)

[[Page 96]]

shall not apply to any week which begins after the effective date of 
such change in the State law; and
    (ii) In the case of a State law which is changed so that regular 
compensation is paid at any time or under any circumstances with respect 
to the first week of unemployment in any individual's benefit year, this 
paragraph (c)(3) shall apply to all weeks which begin after the 
effective date of such change in the State law;
    (4) As provided in section 204(a)(2)(C) of the Act and this part, 
for any week with respect to which Extended Benefits are not payable 
because of the payment of trade readjustment allowances, as provided in 
section 233(d) of the Trade Act of 1974, and Sec.615.7(d).
    (5) As provided in section 204(a)(2)(D) of the Act and this part, if 
the State does not provide for a benefit structure under which benefits 
are rounded down to the next lower dollar amount, for the 50 percent 
Federal share of the amount by which sharable regular or Extended 
Benefits paid to any individual exceeds the nearest lower full dollar 
amount.
    (6) As provided in section 204(a)(3) of the Act, to the extent that 
such compensation is based upon employment and wages in service 
performed for governmental entities or instrumentalities to which 
section 3306(c)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 
3306(c)(7)) applies, in the proportion that wages for such service in 
the base period bear to the total base period wages;
    (7) If the payment made was not sharable extended compensation or 
sharable regular compensation because the payment was not consistent 
with the requirements of--
    (i) Section 202(a)(3) of the Act, and Sec.615.8 (e), (f), or (g);
    (ii) Section 202(a)(4) of the Act, and Sec.615.8(c); or
    (iii) Section 202(a)(5) of the Act, and Sec.615.4(b);
    (8) If the payment made was not sharable extended compensation or 
sharable regular compensation because there was not in effect in the 
State an Extended Benefit Period in accord with the Act and this part; 
or
    (9) For any week with respect to which the claimant was either 
ineligible for or not entitled to the payment.
    (d) Effectuating authorization for reimbursement. (1) If the 
Department believes that reimbursement should not be authorized with 
respect to any payments made by a State that are claimed to be sharable 
compensation paid by the State, because the State law does not contain 
provisions required by the Act and this part, or because such law is not 
interpreted or applied in rules, regulations, determinations or 
decisions in a manner that is consistent with those requirements, the 
Department may at any time notify the State agency in writing of the 
Department's view. The State agency shall be given an opportunity to 
present its views and arguments if desired.
    (2) The Department shall thereupon decide whether the State law 
fails to include the required provisions or is not interpreted and 
applied so as to satisfy the requirements of the Act and this part. If 
the Department finds that such requirements are not met, the Department 
shall notify the State agency of its decision and the effect thereof on 
the State's entitlement to reimbursement under this section and the 
provisions of section 204 of the Act.
    (3) Thereafter, the Department shall not authorize any payment under 
paragraph (a) of this section in respect of any sharable regular or 
extended compensation if the State law does not contain all of the 
provisions required by sections 202 and 203 of the Act and this part, or 
if the State law, rules, regulations, determinations or decisions are 
not consistent with such requirements, or which would not have been 
payable if the State law contained the provisions required by the Act 
and this part or if the State law, rules, regulations, determinations or 
decisions had been consistent with such requirements. Loss of 
reimbursement for such compensation shall begin with the date the State 
law was required to contain such provisions, and shall continue until 
such time as the Department finds that such law, rules and regulations 
have been revised or the interpretations followed pursuant to such 
determinations and decisions have been overruled and payments are made 
or

[[Page 97]]

denied so as to accord with the Federal law requirements of the Act and 
this part, but no reimbursement shall be authorized with respect to any 
payment that did not fully accord with the Act and this part.
    (4) A State agency may request reconsideration of a decision issued 
pursuant to paragraph (d)(2) above, within 10 calendar days of the date 
of such decision, and shall be given an opportunity to present views and 
arguments if desired.
    (5) Concurrence of the Department in any State law provision, rule, 
regulation, determination or decision shall not be presumed from the 
absence of notice issued pursuant to this section or from a 
certification of the State issued pursuant to section 3304(c) of the 
Internal Revenue Code of 1986.
    (6) Upon finding that a State has made payments for which it claims 
reimbursement that are not consistent with the Act or this part, such 
claim shall be denied; and if the State has already been paid such claim 
in advance or by reimbursement, it shall be required to repay the full 
amount to the Department. Such repayment may be made by transfer of 
funds from the State's account in the Unemployment Trust Fund to the 
Extended Unemployment Compensation Account in the Fund, or by offset 
against any current advances or reimbursements to which the State is 
otherwise entitled, or the amount repayable may be recovered for the 
Extended Unemployment Compensation Account by other means and from any 
other sources that may be available to the United States or the 
Department.
    (e) Compensation under Federal unemployment compensation programs. 
The Department shall promptly reimburse each State which has paid 
sharable compensation based on service covered by the UCFE and UCX 
Programs (parts 609 and 614 of this chapter, respectively) pursuant to 5 
U.S.C. chapter 85, an amount which represents the full amount of such 
sharable compensation paid under the State law, or may make advances to 
the State. Such amounts shall be paid from the Federal Employees 
Compensation Account established for those programs, rather than from 
the Extended Unemployment Compensation Account.
    (f) Combined-wage claims. If an individual was paid benefits under 
the Interstate Arrangement for Combining Employment and Wages (part 616 
of this chapter) any payment required by paragraph (a) of this section 
shall be made to the States which contributed the wage credits.
    (g) Interstate claims. Where sharable compensation is paid to an 
individual under the provisions of the Interstate Benefit Payment Plan, 
any payment required by paragraph (a) of this section shall be made only 
to the liable State.

[53 FR 27937, July 25, 1988, as amended at 71 FR 35514, June 21, 2006]



Sec.615.15  Records and reports.

    (a) General. State agencies shall furnish to the Secretary such 
information and reports and make such studies as the Secretary decides 
are necessary or appropriate for carrying out the purposes of the Act 
and this part.
    (b) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Extended Benefit Program as the 
Department requires, and will make all such records available for 
inspection, examination and audit by such Federal officials or employees 
as the Secretary or the Department may designate or as may be required 
by law.
    (c) Weekly report of Extended Benefit data. Each State shall file 
with the Department within 10 calendar days after the end of each 
calendar week a weekly report entitled ETA 539, Extended Benefit Data. 
The report shall include:
    (1) The data reported on the form ETA 539 for the week ending 
(date). Week-ending dates shall always be the Saturday ending date of 
the calendar week beginning at 12:01 a.m. Sunday and ending 12:00 p.m. 
Saturday.
    (2)(i) The number of continued weeks claimed for regular 
compensation in claims filed during the week ending (date). The report 
shall include intrastate continued weeks claimed and interstate 
continued weeks claimed (taken as agent State) but shall exclude 
interstate continued weeks claimed (received as liable State) and 
continued weeks claimed for regular

[[Page 98]]

compensation filed solely under 5 U.S.C. chapter 85; and
    (ii) The report of the number of continued weeks claimed filed in 
the State for regular compensation shall not be adjusted for 
seasonality.
    (3) The average weekly number of weeks claimed in claims filed in 
the most recent calendar week and the immediately preceding 12 calendar 
weeks.
    (4) The rate of insured unemployment for the current 13-week period.
    (5) The average of the rates of insured unemployment in 
corresponding 13-week periods in the preceding two years.
    (6) The current rate of insured unemployment as a percentage of the 
average of the rates in the corresponding 13-week periods in the 
preceding two years.
    (7) The 12 month average monthly employment covered by the State law 
for the first 4 of the last 6 complete calendar quarters ending prior to 
the end of the last week of the current 13-week period to which the 
insured unemployment data relate. Such covered employment shall exclude 
Federal civilian and military employment covered by 5 U.S.C. chapter 85.
    (8) The date that a State Extended Benefit Period begins or ends, or 
a report that there is no change in the existing Extended Benefit Period 
status.
    (d) Methodology. The State agency head shall submit to the 
Department, for approval, the method used to identify and select the 
weeks claimed which are used in the determination of an ``on'' or 
``off'' or ``no change'' indicator. Any change proposed in the method of 
identification and selection of such weeks claimed constitutes a new 
plan which must be submitted to and approved by the Department prior to 
implementing the new plan.

(Approved by the Office of Management and Budget under control number 
1205-0028)



PART 616_INTERSTATE ARRANGEMENT FOR COMBINING EMPLOYMENT AND WAGES
--Table of Contents



Sec.
616.1 Purpose of arrangement.
616.2 Consultation with the State agencies.
616.3 Interstate cooperation.
616.4 Rules, regulations, procedures, forms--resolution of 
          disagreements.
616.6 Definitions.
616.7 Election to file a Combined-Wage Claim.
616.8 Responsibilities of the paying State.
616.9 Responsibilities of transferring States.
616.10 Reuse of employment and wages.
616.11 Amendment of arrangement.

    Authority: 26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 3-2007, 
Apr. 3, 2007 (72 FR 15907).

    Source: 36 FR 24992, Dec. 28, 1971, unless otherwise noted.



Sec.616.1  Purpose of arrangement.

    This arrangement is approved by the Secretary under the provisions 
of section 3304(a)(9)(B) of the Federal Unemployment Tax Act to 
establish a system whereby an unemployed worker with covered employment 
or wages in more than one State may combine all such employment and 
wages in one State, in order to qualify for benefits or to receive more 
benefits.



Sec.616.2  Consultation with the State agencies.

    As required by section 3304(a)(9)(B), this arrangement has been 
developed in consultation with the State unemployment compensation 
agencies. For purposes of such consultation in its formulation and any 
future amendment the Secretary recognizes, as agents of the State 
agencies, the duly designated representatives of the National 
Association of State Workforce Agencies (NASWA).

[36 FR 24992, Dec. 28, 1971, as amended at 71 FR 35514, June 21, 2006]



Sec.616.3  Interstate cooperation.

    Each State agency will cooperate with every other State agency by 
implementing such rules, regulations, and procedures as may be 
prescribed for the operation of this arrangement. Each State agency 
shall identify the paying and the transferring State with respect to 
Combined-Wage Claims filed in its State.



Sec.616.4  Rules, regulations, procedures, forms--resolution of disagreements.

    All State agencies shall operate in accordance with such rules, 
regulations, and procedures, and shall use

[[Page 99]]

such forms, as shall be prescribed by the Secretary in consultation with 
the State unemployment compensation agencies. All rules, regulations, 
and standards prescribed by the Secretary with respect to intrastate 
claims will apply to claims filed under this arrangement unless they are 
clearly inconsistent with the arrangement. The Secretary shall resolve 
any disagreement between State agencies concerning the operation of the 
arrangement, with the advice of the duly designated representatives of 
the State agencies.



Sec.616.6  Definitions.

    These definitions apply for the purpose of this arrangement and the 
procedures issued to effectuate it.
    (a) State. ``State'' includes the States of the United States of 
America, the District of Columbia, the Commonwealth of Puerto Rico, and 
the Virgin Islands.
    (b) State agency. The agency which administers the unemployment 
compensation law of a State.
    (c) Combined-Wage Claim. A claim filed under this arrangement.
    (d) Combined-Wage Claimant. A claimant who has covered wages under 
the unemployment compensation law of more than one State and who has 
filed a claim under this arrangement.
    (e) Paying State. A single State against which the claimant files a 
Combined-Wage Claim, if the claimant has wages and employment in that 
State's base period(s) and the claimant qualifies for unemployment 
benefits under the unemployment compensation law of that State using 
combined wages and employment.
    (f) Transferring State. A State in which a Combined-Wage Claimant 
had covered employment and wages in the base period of a paying State, 
and which transfers such employment and wages to the paying State for 
its use in determining the benefit rights of such claimant under its 
law.
    (g) Employment and wages. ``Employment'' refers to all services 
which are covered under the unemployment compensation law of a State, 
whether expressed in terms of weeks of work or otherwise. ``Wages'' 
refers to all remuneration for such employment.
    (h) Secretary. The Secretary of Labor of the United States.
    (i) Base period and benefit year. The base period and benefit year 
applicable under the unemployment compensation law of the paying State.

[36 FR 24992, Dec. 28, 1971, as amended at 39 FR 45215, Dec. 31, 1974; 
43 FR 2625, Jan. 17, 1978; 71 FR 35514, June 21, 2006; 73 FR 63072, Oct. 
23, 2008]



Sec.616.7  Election to file a Combined-Wage Claim.

    (a) Any unemployed individual who has had employment covered under 
the unemployment compensation law of two or more States, whether or not 
the individual is monetarily qualified under one or more of them, may 
elect to file a Combined-Wage Claim. The individual may not so elect, 
however, if the individual has established a benefit year under any 
State or Federal unemployment compensation law and:
    (1) The benefit year has not ended, and
    (2) The individual still has unused benefit rights based on such 
benefit year. \1\
---------------------------------------------------------------------------

    \1\ The Federal-State Extended Unemployment Compensation Act of 
1970, title II, Public Law 91-373, section 202(a)(1), limits the payment 
of extended benefits with respect to any week to individuals who have no 
rights to regular compensation with respect to such week under any State 
unemployment compensation law or to compensation under any other Federal 
law and in certain other instances. This provision precludes any 
individual from receiving any Federal-State extended benefits with 
respect to any week for which the individual is eligible to receive 
regular benefits based on a Combined Wage Claim. (See section 5752, part 
V of the Employment Security Manual.)
---------------------------------------------------------------------------

    (b) For the purposes of this arrangement, a claimant will not be 
considered to have unused benefit rights based on a benefit year which 
the claimant has established under a State or Federal unemployment 
compensation law if:
    (1) The claimant has exhausted his/her rights to all benefits based 
on such benefit year; or
    (2) The claimant's rights to such benefits have been postponed for 
an indefinite period or for the entire period in which benefits would 
otherwise be payable; or

[[Page 100]]

    (3) Benefits are affected by the application of a seasonal 
restriction.
    (c) If an individual elects to file a Combined-Wage Claim, all 
employment and wages in all States in which the individual worked during 
the base period of the paying State must be included in such combining, 
except employment and wages which are not transferrable under the 
provisions of Sec.616.9(b).
    (d) A Combined-Wage Claimant may withdraw his/her Combined-Wage 
Claim within the period prescribed by the law of the paying State for 
filing an appeal, protest, or request for redetermination (as the case 
may be) from the monetary determination of the Combined-Wage Claim, 
provided the claimant either:
    (1) Repays in full any benefits paid to him thereunder, or
    (2) Authorizes the State(s) against which the claimant files a 
substitute claim(s) for benefits to withhold and forward to the paying 
State a sum sufficient to repay such benefits.
    (e) If the Combined-Wage Claimant files his/her claim in a State 
other than the paying State, the claimant shall do so pursuant to the 
Interstate Benefit Payment Plan.
    (f) If a State denies a Combined-Wage Claim, it must inform the 
claimant of the option to file in another State in which the claimant 
has wages and employment during that State's base period(s).

[36 FR 24992, Dec. 28, 1971, as amended at 71 FR 35514, 35515, June 21, 
2006; 73 FR 63072, Oct. 23, 2008]



Sec.616.8  Responsibilities of the paying State.

    (a) Transfer of employment and wages--payment of benefits. The 
paying State shall request the transfer of a Combined-Wage Claimant's 
employment and wages in all States during its base period, and shall 
determine the claimant's entitlement to benefits (including additional 
benefits, extended benefits and dependents' allowances when applicable) 
under the provisions of its law based on employment and wages in the 
paying State, and all such employment and wages transferred to it 
hereunder. The paying State shall apply all the provisions of its law to 
each determination made hereunder, except that the paying State may not 
determine an issue which has previously been adjudicated by a 
transferring State. Such exception shall not apply, however, if the 
transferring State's determination of the issue resulted in making the 
Combined-Wage Claim possible under Sec.616.7(b)(2). If the paying 
State fails to establish a benefit year for the Combined-Wage Claimant, 
or if the claimant withdraws his/her claim as provided herein, it shall 
return to each transferring State all employment and wages thus unused.
    (b) Notices of determination. The paying State shall give to the 
claimant a notice of each of its determinations on his/her Combined-Wage 
Claim that he/she is required to receive under the Secretary's Claim 
Determinations Standard and the contents of such notice shall meet such 
Standard. When the claimant is filing his/her Combined-Wage Claims in a 
State other than the paying State, the paying State shall send a copy of 
each such notice to the local office in which the claimant filed such 
claims.
    (c) Redeterminations. (1) Redeterminations may be made by the paying 
State in accordance with its law based on additional or corrected 
information received from any source, including a transferring State, 
except that such information shall not be used as a basis for changing 
the paying State if benefits have been paid under the Combined-Wage 
Claim.
    (2) When a determination is made, as provided in paragraph (a) of 
this section, which suspends the use of wages earned in employment with 
an educational institution during a prescribed period between successive 
academic years or terms or other periods as prescribed in the law of the 
paying State in accordance with section 3304(a)(6)(A)(i)-(iv) of the 
Internal Revenue Code of 1986, the paying State shall furnish each 
transferring State involved in the combined-Wage Claim an adjusted 
determination used to recompute each State's proportionate share of any 
charges that may accumulate for benefits paid during the period of 
suspended use of school wages. Wages which are suspended shall be 
retained by the paying State for possible future reinstatement to the 
Combined-

[[Page 101]]

Wage Claim and shall not be returned to the transferring State.
    (d) Appeals. (1) Except as provided in paragraph (d)(3) of this 
section, where the claimant files his/her Combined-Wage Claim in the 
paying State, any protest, request for redetermination or appeal shall 
be in accordance with the law of such State.
    (2) Where the claimant files his/her Combined-Wage Claim in a State 
other than the paying State, or under the circumstances described in 
paragraph (d)(3) of this section, any protest, request for 
redetermination or appeal shall be in accordance with the Interstate 
Benefit Payment Plan.
    (3) To the extent that any protest, request for redetermination or 
appeal involves a dispute as to the coverage of the employing unit or 
services in a transferring State, or otherwise involves the amount of 
employment and wages subject to transfer, the protest, request for 
redetermination or appeal shall be decided by the transferring State in 
accordance with its law.
    (e) Recovery of prior overpayments. If there is an overpayment 
outstanding in a transferring State and such transferring State so 
requests, the overpayment shall be deducted from any benefits the paying 
State would otherwise pay to the claimant on his/her Combined-Wage Claim 
except to the extent prohibited by the law of the paying State. The 
paying State shall transmit the amount deducted to the transferring 
State or credit the deduction against the transferring State's required 
reimbursement under this arrangement. This paragraph shall apply to 
overpayments only if the transferring State certifies to the paying 
State that the determination of overpayment was made within 3 years 
before the Combined-Wage Claim was filed and that repayment by the 
claimant is legally required and enforceable against him/her under the 
law of the transferring State.
    (f) Statement of benefit charges. (1) At the close of each calendar 
quarter, the paying State shall send each transferring State a statement 
of benefits charged during such quarter to such State as to each 
Combined-Wage Claimant.
    (2) Except as provided in paragraphs (c)(2), (f)(3), and (f)(5) of 
this section, each such charge shall bear the same ratio to the total 
benefits paid to the Combined-Wage Claimant by the paying State as the 
claimant's wages transferred by the transferring State bear to the total 
wages used in such determination. Each such ratio shall be computed as a 
percentage, to three or more decimal places.
    (3) Charges to the transferring State shall not include the costs of 
any benefits paid which are funded or reimbursed from the Federal 
Unemployment Benefits and Allowances account in the U.S. Department of 
Labor appropriation, including:
    (i) Benefits paid pursuant to 5 U.S.C. 8501-8525; and
    (ii) Benefits which are reimbursable under part B of title II of the 
Emergency Jobs and Unemployment Assistance Act of 1974 (Pub. L. 93-567).
    (4) Except as provided in paragraphs (f)(3) and (f)(5) of this 
section, all transferring States will be charged by the paying State for 
Extended Benefits in the same manner as for regular benefits.
    (5) The United States shall be charged directly by the paying State, 
in the same manner as is provided in paragraphs (f)(1) and (f)(2) of 
this section, in regard to Federal civilian service and wages and 
Federal military service and wages assigned or transferred to the paying 
State and included in Combined-Wage Claims in accordance with this part 
and parts 609 and 614 of this chapter.

(26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 4-75, (40 FR 18515))

[36 FR 24992, Dec. 28, 1971, as amended at 43 FR 2625, Jan. 17, 1978; 45 
FR 47109, July 11, 1980; 71 FR 35515, June 21, 2006; 73 FR 63072, Oct. 
23, 2008]



Sec.616.9  Responsibilities of transferring States.

    (a) Transfer of employment and wages. Each transferring State shall 
promptly transfer to the Paying State the employment and wages the 
Combined-Wage Claimant had in covered employment during the base period 
of the paying State. Any employment and wages so transferred shall be 
transferred without restriction as to their use for

[[Page 102]]

determination and benefit payments under the provisions of the paying 
State's law.
    (b) Employment and wages not transferable. Employment and wages 
transferred to the paying State by a transferring State shall not 
include:
    (1) Any employment and wages which have been transferred to any 
other paying State and not returned unused, or which have been used in 
the transferring State as the basis of a monetary determination which 
established a benefit year.
    (2) Any employment and wages which have been canceled or are 
otherwise unavailable to the claimant as a result of a determination by 
the transferring State made prior to its receipt of the request for 
transfer, if such determination has become final or is in the process of 
appeal but is still pending. If the appeal is finally decided in favor 
of the Combined-Wage Claimant, any employment and wages involved in the 
appeal shall forthwith be transferred to the paying State and any 
necessary redetermination shall be made by such paying State.
    (c) Reimbursement of paying State. Each transferring State shall, as 
soon as practicable after receipt of a quarterly statement of charges 
described herein, reimburse the paying State accordingly.

(26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 4-75, (40 FR 18515))

[36 FR 24992, Dec. 28, 1971, as amended at 45 FR 47109, July 11, 1980]



Sec.616.10  Reuse of employment and wages.

    Employment and wages which have been used under this arrangement for 
a determination of benefits which establishes a benefit year shall not 
thereafter be used by any State as the basis for another monetary 
determination of benefits.



Sec.616.11  Amendment of arrangement.

    Periodically the Secretary shall review the operation of this 
arrangement, and shall propose such amendments to the arrangement as the 
Secretary believes are necessary or appropriate. Any State unemployment 
compensation agency or NASWA may propose amendments to the arrangement. 
Any proposal shall constitute an amendment to the arrangement upon 
approval by the Secretary in consultation with the State unemployment 
compensation agencies. Any such amendment shall specify when the change 
shall take effect, and to which claims it shall apply.

[36 FR 24992, Dec. 28, 1971, as amended at 71 FR 35515, June 21, 2006]



PART 617_TRADE ADJUSTMENT ASSISTANCE FOR WORKERS UNDER THE TRADE
ACT OF 1974--Table of Contents



                            Subpart A_General

Sec.
617.1 Scope.
617.2 Purpose.
617.3 Definitions.
617.4 Benefit information to workers.

              Subpart B_Trade Readjustment Allowances (TRA)

617.10 Applications for TRA.
617.11 Qualifying requirements for TRA.
617.12 Evidence of qualification.
617.13 Weekly amounts of TRA.
617.14 Maximum amount of TRA.
617.15 Duration of TRA.
617.16 Applicable State law.
617.17 Availability and active search for work.
617.18 Disqualifications.
617.19 Requirement for participation in training.

                     Subpart C_Reemployment Services

617.20 Responsibilities for the delivery of reemployment services.
617.21 Reemployment services and allowances.
617.22 Approval of training.
617.23 Selection of training methods and programs.
617.24 Preferred training.
617.25 Limitations on training under subpart C of this part.
617.26 Liable and agent State responsibilities.
617.27 Subsistence payments.
617.28 Transportation payments.
617.29 Application of EB work test.

                     Subpart D_Job Search Allowances

617.30 General.
617.31 Applications.
617.32 Eligibility.
617.33 Findings required.
617.34 Amount.
617.35 Time and method of payment.

[[Page 103]]

                     Subpart E_Relocation Allowances

617.40 General.
617.41 Applications.
617.42 Eligibility.
617.43 Time of relocation.
617.44 Findings required.
617.45 Amount.
617.46 Travel allowance.
617.47 Moving allowance.
617.48 Time and method of payment.

                      Subpart F_Job Search Program

617.49 Job Search Program.

          Subpart G_Administration by Applicable State Agencies

617.50 Determinations of entitlement; notices to individuals.
617.51 Appeals and hearings.
617.52 Uniform interpretation and application.
617.53 Subpoenas.
617.54 State agency rulemaking.
617.55 Overpayments; penalties for fraud.
617.56 Inviolate rights to TAA.
617.57 Recordkeeping; disclosure of information.
617.58 Unemployment insurance.
617.59 Agreements with State agencies.
617.60 Administration requirements. [Reserved]
617.61 Information, reports, and studies.
617.64 Termination of TAA program benefits.

Appendix A to Part 617--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 617--Standard for Claim Determinations--Separation 
          Information
Appendix C to Part 617--Standard for Fraud and Overpayment Detection

    Authority: 19 U.S.C. 2320; Secretary's Order No. 3-81, 46 FR 31117.

    Source: 51 FR 45848, Dec. 22, 1986, unless otherwise noted.



                            Subpart A_General



Sec.617.1  Scope.

    The regulations in this part 617 pertain to:
    (a) Adjustment assistance, such as counseling, testing, training, 
placement, and other supportive services for workers adversely affected 
under the terms of chapter 2 of title II of the Trade Act of 1974, as 
amended (hereafter referred to as the Act);
    (b) Trade readjustment allowances (hereafter referred to as TRA) and 
other allowances such as allowances while in training, job search and 
relocation allowances; and
    (c) Administrative requirements applicable to State agencies to 
which such individuals may apply.



Sec.617.2  Purpose.

    The Act created a program of trade adjustment assistance (hereafter 
referred to as TAA) to assist individuals, who became unemployed as a 
result of increased imports, return to suitable employment. The TAA 
program provides for reemployment services and allowances for eligible 
individuals. The regulations in this part 617 are issued to implement 
the Act.



Sec.617.3  Definitions.

    For the purposes of the Act and this part 617:
    (a) Act means chapter 2 of title II of the Trade Act of 1974, Pub. 
L. 93-618, 88 Stat. 1978, 2019-2030 (19 U.S.C. 2271-2322), as amended.
    (b) Adversely affected employment means employment in a firm or 
appropriate subdivision of a firm, including workers in any agricultural 
firm or subdivision of an agricultural firm, if workers of such firm or 
appropriate subdivision are certified under the Act as eligible to apply 
for TAA.
    (c) Adversely affected worker means an individual who, because of 
lack of work in adversely affected employment:
    (1) Has been totally or partially separated from such employment; or
    (2) Has been totally separated from employment with the firm in a 
subdivision of which such adversely affected employment exists.
    (d) Appropriate week means the week in which the individual's first 
separation occurred.
    (e) Average weekly hours means a figure obtained by dividing:
    (1) Total hours worked (excluding overtime) by a partially separated 
individual in adversely affected employment in the 52 weeks (excluding 
weeks in such period during which the individual was sick or on 
vacation) preceding the individual's first qualifying separation, by
    (2) The number of weeks in such 52 weeks (excluding weeks in such 
period during which the individual was sick or

[[Page 104]]

on vacation) in which the individual actually worked in such employment.
    (f) Average weekly wage means one-thirteenth of the total wages paid 
to an individual in the individual's high quarter. The high quarter for 
an individual is the quarter in which the total wages paid to the 
individual were highest among the first four of the last five completed 
calendar quarters preceding the individual's appropriate week.
    (g) Average weekly wage in adversely affected employment means a 
figure obtained by dividing:
    (1) Total wages earned by a partially separated individual in 
adversely affected employment in the 52 weeks (excluding the weeks in 
that period the individual was sick or on vacation) preceding the 
individual's first qualifying separation, by
    (2) The number of weeks in such 52 weeks (excluding the weeks in 
that period the individual was sick or on vacation) the individual 
actually worked in such employment.
    (h) Benefit period means, with respect to an individual:
    (1) The benefit year and any ensuing period, as determined under the 
applicable State law, during which the individual is eligible for 
regular compensation, additional compensation, extended compensation, or 
federal supplemental compensation, as these terms are defined by 
paragraph (oo) of this section; or
    (2) The equivalent to such a benefit year or ensuing period provided 
for under the Federal unemployment insurance law.
    (i) Bona fide application for training means an individual's signed 
and dated application for training filed with the State agency 
administering the TAA training program, on a form necessarily containing 
the individual's name, petition number, local office number, and 
specific occupational training. This form shall be signed and dated by a 
State agency representative upon receipt.
    (j)(1) Certification means a certification of eligibility to apply 
for TAA issued under section 223 of the Act with respect to a specified 
group of workers of a firm or appropriate subdivision of a firm.
    (2) Certification period means the period of time during which total 
and partial separations from adversely affected employment within a firm 
or appropriate subdivision of a firm are covered by the certification.
    (k) Commuting area means the area in which an individual would be 
expected to travel to and from work on a daily basis as determined under 
the applicable State law.
    (l) Date of separation means:
    (1) With respect to a total separation--
    (i) For an individual in employment status, the last day worked; and
    (ii) For an individual on employer-authorized leave, the last day 
the individual would have worked had the individual been working; and
    (2) With respect to a partial separation, the last day of the week 
in which the partial separation occurred.
    (m) Eligibility period means the period of consecutive calendar 
weeks during which basic or additional TRA is payable to an otherwise 
eligible individual, and for an individual such eligibility period is--
    (1) Basic TRA. With respect to a total qualifying separation (as 
defined in paragraph (t)(3)(i) of this section) the 104-week period 
beginning with the first week following the week in which such total 
qualifying separation occurred; provided, that an individual who has a 
second or subsequent total qualifying separation within the 
certification period of the same certification shall be determined to 
have a new 104-week eligibility period based upon the most recent such 
total qualifying separation.
    (2) Additional TRA. With respect to additional weeks of TRA, and any 
individual determined under this part 617 to be entitled to additional 
TRA, the consecutive calendar weeks that occur in the 26-week period 
that--
    (i) Immediately follows the last week of entitlement to basic TRA 
otherwise payable to the individual, or
    (ii) Begins with the first week of training approved under this part 
617, if such training begins after the last week described in paragraph 
(m)(2)(i) of this section, or
    (iii) Begins with the first week in which such training is approved 
under

[[Page 105]]

this part 617, if such training is so approved after the training has 
commenced; but approval of training under this part 617 after the 
training has commenced shall not imply or justify approval of a payment 
of basic or additional TRA with respect to any week which ended before 
the week in which such training was approved, nor approval of payment of 
any costs of training or any costs or expenses associated with such 
training (such as travel or subsistence) which were incurred prior to 
the date of the approval of such training under this part 617.
    (n) Employer means any individual or type of organization, including 
the Federal government, a State government, a political subdivision, or 
an instrumentality of one or more governmental entities, with one or 
more individuals performing service in employment for it within the 
United States.
    (o) Employment means any service performed for an employer by an 
officer of a corporation or an individual for wages.
    (p) Exhaustion of UI means exhaustion of all rights to UI in a 
benefit period by reason of:
    (1) Having received all UI to which an individual was entitled under 
the applicable State law or Federal unemployment compensation law with 
respect to such benefit period; or
    (2) The expiration of such benefit period.
    (q) Family means the following members of an individual's household 
whose principal place of abode is with the individual in a home the 
individual maintains or would maintain but for unemployment:
    (1) A spouse;
    (2) An unmarried child, including a stepchild, adopted child, or 
foster child, under age 21 or of any age if incapable of self-support 
because of mental or physical incapacity; and
    (3) Any other person whom the individual would be entitled to claim 
as a dependent for income tax purposes under the Internal Revenue Code 
of 1986.
    (r) First benefit period means the benefit period established after 
the individual's first qualifying separation or in which such separation 
occurs.
    (s) First exhaustion of UI means the first time in an individual's 
first benefit period that the individual exhausts all rights to UI; 
first exhaustion shall be deemed to be complete at the end of the week 
the exhaustion occurs.
    (t)(1) First separation means, for an individual to qualify as an 
adversely affected worker for the purposes of TAA program benefits 
(without regard to whether the individual also qualifies for TRA), the 
individual's first total or partial separation within the certification 
period of a certification, irrespective of whether such first separation 
also is a qualifying separation as defined in paragraph (t)(2) of this 
section;
    (2) Qualifying separation means for an individual to qualify as an 
adversely affected worker and for basic TRA, any total separation of the 
individual within the certification period of a certification with 
respect to which the individual meets all of the requirements in Sec.
617.11(a)(2)(i) through (iv), and which qualifies as a total qualifying 
separation as defined in paragraph (B) of (t)(3)(i) of this section.
    (3) First qualifying separation means--
    (i) For the purposes of determining an individual's eligibility 
period for basic TRA, the first total separation of the individual 
within the certification period of a certification, with respect to 
which the individual meets all of the requirements in Sec.
617.11(a)(2)(i) through (iv).
    (ii) For the purposes of determining the weekly and maximum amounts 
of basic TRA payable to an individual, with respect to a separation that 
occurs before, on, or after August 23, 1988, the individual's first 
(total or partial) separation within the certification period of a 
certification if, with respect to such separation, the individual meets 
the requirements of Sec.617.11(a)(1) (i), (ii) and (iv) or Sec.
617.11(a)(2) (i), (ii) and (iv).
    (u) Head of family means an individual who maintains a home for a 
family. An individual maintains a home if over half the cost of 
maintenance is furnished by the individual or would be furnished but for 
unemployment.
    (v) Impact date means the date stated in a certification issued 
under the Act

[[Page 106]]

on which total or partial separations began or threatened to begin in a 
firm or a subdivision of a firm.
    (w) Job search program means a job search workshop or job finding 
club.
    (x) Job search workshop means a short (1 to 3 days) seminar designed 
to provide participants with knowledge that will enable the participants 
to find jobs. Subjects should include, but not be limited to, labor 
market information, resume writing, interviewing techniques, and 
techniques for finding job openings.
    (y) Job finding club means a job search workshop which includes a 
period of 1 to 2 weeks of structured, supervised activity in which 
participants attempt to obtain jobs.
    (z) Layoff means a suspension of or separation from employment by a 
firm for lack of work, initiated by the employer, and expected to be for 
a definite or indefinite period of not less than seven consecutive days.
    (aa) Liable State and Agent State are defined as follows:
    (1) Liable State means, with respect to any individual, the State 
whose State law is the applicable State law as determined under Sec.
617.16 for all purposes of this Part 617.
    (2) Agent State means, with respect to any individual, any State 
other than the State which is the liable State for such individual.
    (bb) On-the-job training means training provided by an employer to 
an individual who is employed by the employer.
    (cc) Partial separation means that during a week ending on or after 
the impact date specified in the certification under which an adversely 
affected worker is covered, the individual had:
    (1) Hours of work reduced to 80 percent or less of the individual's 
average weekly hours in adversely affected employment; and
    (2) Wages reduced to 80 percent or less of the individual's average 
weekly wage in such adversely affected employment.
    (dd) Regional Administrator means the appropriate Regional 
Administrator of the Employment and Training Administration, United 
States Department of Labor (hereafter Department).
    (ee) Remuneration means remuneration as defined in the applicable 
State law.
    (ff) Secretary means the Secretary of Labor, U.S. Department of 
Labor, or his or her designee.
    (gg) Separate maintenance means maintaining another (second) 
residence, in addition to the individual's regular place of residence, 
while attending a training facility outside the individual's commuting 
area.
    (hh) State means the States of the United States, the District of 
Columbia, and the Commonwealth of Puerto Rico, and the term ``United 
States'' when used in a geographical sense includes such Commonwealth.
    (ii) State agency means the State Workforce Agency; the employment 
service of the State; any State agency carrying out title I, Subchapter 
B of the Workforce Investment Act; or any other State or local agency 
administering job training or related programs with which the Secretary 
has an agreement to carry out any of the provisions of the Act.
    (jj) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1986 (26 U.S.C. 3304).
    (kk) Suitable work means, with respect to an individual:
    (1) Suitable work as defined in the applicable State law for 
claimants for regular compensation (as defined in paragraph (oo)(1) of 
this section); or
    (2) Suitable work as defined in applicable State law provisions 
consistent with section 202(a)(3) of the Federal-State Extended 
Unemployment Compensation Act of 1970;

whichever is applicable, but does not in any case include self-
employment or employment as an independent contractor.
    (ll) Total separation means a layoff or severance of an individual 
from employment with a firm in which, or in a subdivision of which, 
adversely affected employment exists.

[[Page 107]]

    (mm) Trade adjustment assistance (TAA) means the services and 
allowances provided for achieving reemployment of adversely affected 
workers, including TRA, training and other reemployment services, and 
job search allowances and relocation allowances.
    (nn) Trade readjustment allowance (TRA) means a weekly allowance 
payable to an adversely affected worker with respect to such worker's 
unemployment under subpart B of this part 617.
    (oo) Unemployment insurance (UI) means the unemployment compensation 
payable to an individual under any State law or Federal unemployment 
compensation law, including chapter 85, title 5 of the United States 
Code, and the Railroad Unemployment Insurance Act. ``UI'' includes 
``regular compensation,'' ``additional compensation,'' ``extended 
compensation,'' and ``federal supplemental compensation,'' defined as 
follows:
    (1) Regular compensation means unemployment compensation payable to 
an individual under any State law, and, when so payable, includes 
unemployment compensation payable pursuant to chapter 85, title 5 of the 
United States Code, but does not include extended compensation, 
additional compensation, or federal supplemental compensation;
    (2) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors 
and, when so payable, includes unemployment compensation payable 
pursuant to chapter 85, title 5 of the United States Code; and
    (3) Extended compensation means the extended unemployment 
compensation payable to an individual for weeks of unemployment which 
begin in an Extended Benefit Period, under those provisions of a State 
law which satisfy the requirements of the Federal-State Extended 
Unemployment Compensation Act of 1970 and regulations governing the 
payment of extended unemployment compensation, and, when so payable, 
includes unemployment compensation payable pursuant to chapter 85, title 
5 of the United States Code, but does not include regular compensation, 
additional compensation, or federal supplemental compensation. Extended 
compensation is also referred to in this part 617 as Extended Benefits 
or EB.
    (4) Federal supplemental compensation means the supplemental 
unemployment compensation payable to individuals who have exhausted 
their rights to regular and extended compensation, and which is payable 
under the Federal Supplemental Compensation Act of 1982 or any similar 
Federal law enacted before or after the 1982 Act.
    (pp) Wages means all compensation for employment for an employer, 
including commissions, bonuses, and the cash value of all compensation 
in a medium other than cash.
    (qq) Week means a week as defined in the applicable State law.
    (rr) Week of unemployment means a week of total, part total, or 
partial unemployment as determined under the applicable State law or 
Federal unemployment compensation law.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32348, Aug. 24, 1988; 
59 FR 926, 927, Jan. 6, 1994; 61 FR 19983, May 3, 1996; 71 FR 35515, 
June 21, 2006]



Sec.617.4  Benefit information to workers.

    (a) Providing information to workers. State agencies shall provide 
full information to workers about the benefit allowances, training, and 
other employment services available under subparts B through E of this 
part 617 and about the petition and application procedures, and the 
appropriate filing dates, for such allowances, training and services.
    (b) Providing assistance to workers. State agencies shall provide 
whatever assistance is necessary to enable groups of workers, including 
unorganized workers, to prepare petitions or applications for program 
benefits.
    (c) Providing information to State vocational education agencies and 
others. State agencies shall inform the State Board for Vocational 
Education or equivalent agency and other public or private agencies, 
institutions, and employers, as appropriate, of each certification 
issued under section 223 of the Act and of projections, if available, of 
the needs for training under section 236

[[Page 108]]

of the Act as a result of such certification.
    (d) Written and newspaper notices--(1) Written notices to workers. 
(i) Upon receipt of a certification issued by the Department of Labor, 
the State agency shall provide a written notice through the mail of the 
benefits available under subparts B through E of this part 617 to each 
worker covered by a certification issued under section 223 of the Act 
when the worker is partially or totally separated or as soon as possible 
after the certification is issued if such workers are already partially 
or totally separated from adversely affected employment.
    (ii) The State agency will satisfy this requirement by obtaining 
from the firm, or other reliable source, the names and addresses of all 
workers who were partially or totally separated from adversely affected 
employment before the certification was received by the agency, and 
workers who are thereafter partially or totally separated within the 
certification period. The State agency shall mail a written notice to 
each such worker of the benefits available under the TAA Program. The 
notice must include the following information:
    (A) Worker group(s) covered by the certification, and the article(s) 
produced as specified in the copy of the certification furnished to the 
State agency.
    (B) Name and the address or location of workers' firm.
    (C) Impact, certification, and expiration dates in the certification 
document.
    (D) Benefits and reemployment services available to eligible 
workers.
    (E) Explanation of how workers apply for TAA benefits and services.
    (F) Whom to call to get additional information on the certification.
    (G) When and where the workers should come to apply for benefits and 
services.
    (2) Newspaper notices. (i) Upon receipt of a copy of a certification 
issued by the Department affecting workers in a State, the State agency 
shall publish a notice of such certification in a newspaper of general 
circulation in areas in which such workers reside. Such a newspaper 
notice shall not be required to be published, however, in the case of a 
certification with respect to which the State agency can substantiate, 
and enters in its records evidence substantiating, that all workers 
covered by the certification have received written notice required by 
paragraph (d)(1) of this section.
    (ii) A published notice must include the following kinds of 
information:
    (A) Worker group(s) covered by the certification, and the article(s) 
produced as specified in the copy of the certification furnished to the 
State agency.
    (B) Name and the address or location of workers' firm.
    (C) Impact, certification, and expiration dates in the certification 
document.
    (D) Benefits and reemployment services available to eligible 
workers.
    (E) Explanation of how and where workers should apply for TAA 
benefits and services.
    (e) Advice and assistance to workers. In addition to the information 
and assistance to workers as required under paragraphs (a) and (b) of 
this section, State agencies shall--
    (1) Advise each worker who applies for unemployment insurance under 
the State law of the benefits available under subparts B through E of 
this part and the procedures and deadlines for applying for such 
benefits.
    (2) Facilitate the early filing of petitions under section 221 of 
the Act and Sec.617.4(b) for any workers that the agency considers are 
likely to be eligible for benefits. State agencies shall utilize 
information received by the State's dislocated worker unit to facilitate 
the early filing of petitions under section 221 of the Act by workers 
potentially adversely affected by imports.
    (3) Advise each adversely affected worker to apply for training 
under Sec.617.22(a) before, or at the same time as, the worker applies 
for trade readjustment allowances under subpart B of this part.
    (4) Interview each adversely affected worker, as soon as 
practicable, regarding suitable training opportunities available to the 
worker under Sec.617.22(a)

[[Page 109]]

and review such opportunities with the worker.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 927, Jan. 6, 1994]



              Subpart B_Trade Readjustment Allowances (TRA)



Sec.617.10  Applications for TRA.

    (a) Before and after certification. An individual covered under a 
certification or a petition for certification may apply to a State 
agency for TRA. A determination shall be made at any time to the extent 
necessary to establish or protect an individual's entitlement to TRA or 
other TAA, but no payment of TRA or other TAA may be made by a State 
agency until a certification is made and the State agency determines 
that the individual is covered thereunder.
    (b) Timing of applications. An initial application for TRA, and 
applications for TRA for weeks of unemployment beginning before the 
initial application for TRA is filed, may be filed within a reasonable 
period of time after publication of the determination certifying the 
appropriate group of workers under section 223 of the Act. However, an 
application for TRA for a week of unemployment beginning after the 
initial application is filed shall be filed within the time limit 
applicable to claims for regular compensation under the applicable State 
law. For purposes of this paragraph (b), a reasonable period of time 
means such period of time as the individual had good cause for not 
filing earlier, which shall include, but not be limited to, the 
individual's lack of knowledge of the certification or misinformation 
supplied the individual by the State agency.
    (c) Applicable procedures. Applications shall be filed in accordance 
with this subpart B and on forms which shall be furnished to individuals 
by the State agency. The procedures for reporting and filing 
applications for TRA shall be consistent with this part 617 and the 
Secretary's ``Standard for Claim Filing, Claimant Reporting, Job Finding 
and Employment Services'', Employment Security Manual, part V, sections 
5000 et seq. (Appendix A of this part).
    (d) Advising workers to apply for training. State agencies shall 
advise each worker of the qualifying requirements for entitlement to TRA 
and other TAA benefits at the time the worker files an initial claim for 
State UI, and shall advise each adversely affected worker to apply for 
training under subpart C of this part before, or at the same time, the 
worker applies for TRA, as required by Sec.617.4(e)(1) and (3).

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 928, 943, Jan. 6, 1994]



Sec.617.11  Qualifying requirements for TRA.

    (a) Basic qualifying requirements for entitlement--(1) [Reserved]
    (2) To qualify for TRA for any week of unemployment an individual 
must meet each of the following requirements of paragraphs (a)(2) (i) 
through (vii) of this section:
    (i) Certification. The individual must be an adversely affected 
worker covered under a certification.
    (ii) Separation. The individual's first qualifying separation (as 
defined in paragraph (t)(3)(i) of Sec.617.3) before application for 
TRA must occur:
    (A) On or after the impact date of such certification; and
    (B) Before the expiration of the two-year period beginning on the 
date of such certification, or, if earlier, before the termination date, 
if any, of such certification.
    (iii) Wages and employment. (A) In the 52-week period (i.e., 52 
consecutive calendar weeks) ending with the week of the individual's 
first qualifying separation, or any subsequent total qualifying 
separation under the same certification, the individual must have had at 
least 26 weeks of employment at wages of $30 or more a week in adversely 
affected employment with a single firm or subdivision of a firm. 
Evidence that an individual meets this requirement shall be obtained as 
provided in Sec.617.12. Employment and wages covered under more than 
one certification may not be combined to qualify for TRA.
    (B)(1) For the purposes of paragraph (a)(2)(iii) of this section, 
any week in which such individual--

[[Page 110]]

    (i) Is on employer-authorized leave from such adversely affected 
employment for purposes of vacation, sickness, injury, maternity, or 
inactive duty or active duty military service for training, or
    (ii) Does not work in such adversely affected employment because of 
a disability compensable under a workers' compensation law or plan of a 
State or the United States, or
    (iii) Had adversely affected employment interrupted to serve as a 
full-time representative of a labor organization in such firm or 
subdivision, or
    (iv) Is on call-up for the purpose of active duty in a reserve 
status in the Armed Forces of the United States (if such week began 
after August 1, 1990), provided such active duty is ``Federal service'' 
as defined in part 614 of this chapter,

shall be treated as a week of employment at wages of $30 or more;
    (2) Provided, that--
    (i) Not more than 7 weeks in the case of weeks described in 
paragraph (a)(2)(iii)(B)(1) (i) or (iii) of this section, or both, and
    (ii) Not more than 26 weeks described in paragraph (a)(2)(iii)(B)(1) 
(ii) or (iv) of this section,

may be treated as weeks of employment for purposes of paragraph 
(a)(2)(iii) of this section.
    (C) Wages and employment creditable under paragraph (a)(2)(iii) of 
this section shall not include employment or wages earned or paid for 
employment which is contrary to or prohibited by any Federal law.
    (iv) Entitlement to UI. The individual must have been entitled to 
(or would have been entitled to if the individual had applied therefor) 
UI for a week within the benefit period--
    (A) in which the individual's first qualifying separation occurred, 
or
    (B) which began (or would have begun) by reason of the filing of a 
claim for UI by the individual after such first qualifying separation.
    (v) Exhaustion of UI. The individual must:
    (A) Have exhausted all rights to any UI to which the individual was 
entitled (or would have been entitled if the individual had applied 
therefor); and
    (B) Not have an unexpired waiting period applicable to the 
individual for any such UI.
    (vi) Extended Benefit work test. (A) The individual must--
    (1) Accept any offer of suitable work, as defined in Sec.
617.3(kk), and actually apply for any suitable work the individual is 
referred to by the State agency, and
    (2) Actively engage in seeking work and furnish the State agency 
tangible evidence of such efforts each week, and
    (3) Register for work and be referred by the State agency to 
suitable work,

in accordance with those provisions of the applicable State law which 
apply to claimants for Extended Benefits and which are consistent with 
part 615 of this chapter.
    (B) The Extended Benefit work test shall not apply to an individual 
with respect to claims for TRA for weeks of unemployment beginning prior 
to the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the Extended 
Benefit work test requirements of paragraph (a)(2)(vi) of this section 
and Sec.617.17. Prior to such notification and advice, the individual 
shall not be subject to the Extended Benefit work test requirements, nor 
to any State timely filing requirement, but shall be required to be 
unemployed and able to work and available for work with respect to any 
such week except as provided in Sec.617.17(b)(2) for workers enrolled 
in, or participating in, a training program approved under Sec.
617.22(a).
    (vii) Participation in training. (A) The individual must--
    (1) Be enrolled in or participating in a training program approved 
pursuant to Sec.617.22(a), or
    (2) Have completed a training program approved under Sec.
617.22(a), after a total or partial separation from adversely affected 
employment within the certification period of a certification issued 
under the Act, or
    (3) Have received from the State agency a written statement under 
Sec.617.19 waiving the participation in training requirement for the 
individual.

[[Page 111]]

    (B) The participation in training requirement of paragraph 
(a)(2)(vii) of this section shall not apply to an individual with 
respect to claims for TRA for weeks of unemployment beginning prior to 
the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the 
participation in training requirement of paragraph (a)(2)(vii) of this 
section and Sec.617.19.
    (C) The participation in training requirement of paragraph 
(a)(2)(vii) of this section shall apply, as a qualifying requirement for 
TRA, to an individual with respect to claims for TRA for weeks of 
unemployment commencing on or after November 21, 1988, and beginning 
with the first week following the week in which a certification covering 
the individual is issued under the Act, unless the State agency has 
issued a written statement to the individual under Sec.617.19 waiving 
the participation in training requirement for the individual.
    (D) For purposes of paragraph (a)(2)(vii) of this section, the 
following definitions shall apply:
    (1) Enrolled in training. A worker shall be considered to be 
enrolled in training when the worker's application for training is 
approved by the State agency and the training institution has furnished 
written notice to the State agency that the worker has been accepted in 
the approved training program which is to begin within 30 calendar days 
of the date of such approval. (A waiver under Sec.617.19 shall not be 
required for an individual who is enrolled in training as defined 
herein.)
    (2) Completed training. A worker shall be considered to have 
completed a training program if the training program was approved, or 
was approvable and is approved, pursuant to Sec.617.22, and the 
training was completed subsequent to the individual's total or partial 
separation from adversely affected employment within the certification 
period of a certification issued under the Act, and the training 
provider has certified that all the conditions for completion of the 
training program have been satisfied.
    (3)-(4) [Reserved]
    (b) First week of entitlement. The first week any individual may be 
entitled to a payment of basic TRA shall be the later of:
    (1) The first week beginning more than 60 days after the date of the 
filing of the petition which resulted in the certification under which 
the individual is covered; or
    (2) The first week beginning after the individual's exhaustion of 
all rights to UI including waiting period credit, as determined under 
Sec.617.11(a)(2).

[59 FR 928, Jan. 6, 1994, as amended at 71 FR 35515, June 21, 2006]



Sec.617.12  Evidence of qualification.

    (a) State agency action. When an individual applies for TRA, the 
State agency having jurisdiction under Sec.617.50(a) shall obtain 
information necessary to establish:
    (1) Whether the individual meets the qualifying requirements in 
Sec.617.11;
    (2) The individual's average weekly wage; and
    (3) For an individual claiming to be partially separated, the 
average weekly hours and average weekly wage in adversely affected 
employment.
    (b) Insufficient data. If information specified in paragraph (a) of 
this section is not available from State agency records or from any 
employer, the State agency shall require the individual to submit a 
signed statement setting forth such information as may be required for 
the State agency to make the determinations required by paragraph (a) of 
this section.
    (c) Verification. A statement made under paragraph (b) of this 
section shall be certified by the individual to be true to the best of 
the individual's knowledge and belief and shall be supported by evidence 
such as Forms W-2, paycheck stubs, union records, income tax returns, or 
statements of fellow workers, and shall be verified by the employer.
    (d) Determinations. The State agency shall make the necessary 
determinations on the basis of information obtained pursuant to this 
section, except that if, after reviewing information obtained under 
paragraph (b) of this section against other available data, including 
agency records, it concludes

[[Page 112]]

that such information is not reasonably accurate, it shall make 
appropriate adjustments and shall make the determination on the basis of 
the adjusted data.



Sec.617.13  Weekly amounts of TRA.

    (a) Regular allowance. The amount of TRA payable for a week of total 
unemployment (including a week of training approved under subpart C of 
this part 617 or under the provisions of the applicabIe State law) shall 
be an amount equal to the most recent weekly benefit amount of UI 
(including dependents' allowances) payable to the individual for a week 
of total unemployment preceding the individual's first exhaustion of UI 
following the individual's first qualifying separation: Provided, that 
in a State in which weeks of UI are paid in varying amounts related to 
wages with separate employers, the weekly amount of TRA shall be 
calculated as it would be to pay extended compensation: Provided, 
further, that where a State calculates a base amount of UI and 
calculates dependents' allowances on a weekly supplemental basis. TRA 
weekly benefit amounts shall be calculated in the same manner and under 
the same terms and conditions as apply to claimants for UI, except that 
the base amount shall not change.
    (b) Increased allowance. An individual in training approved under 
subpart C of this part 617 who is thereby entitled for any week to TRA 
and a training allowance under any other Federal law for the training of 
workers shall be paid in the amount computed under paragraph (a) of this 
section or, if greater, the amount to which the individual would be 
entitled under such other Federal law if the individual applied for such 
allowance, as provided in section 232(b) of the Act. A payment under 
this paragraph (b) shall be in lieu of any training allowance to which 
the individual is entitled under such other Federal law.
    (c) Reduction of amount. An amount of TRA payabIe under paragraph 
(a) or (b) of this section for any week shall be reduced (but not below 
zero) by:
    (1) Income that is deductible from UI under the disqualifying income 
provisions of the applicable State law or Federal unemployment 
compensation law;
    (2) The amount of a training allowance (other than a training 
allowance referred to in paragraph (b) of this section) under any 
Federal law that the individual receives for such week, as provided in 
section 232(c) of the Act. This paragraph (c) shall apply to Veterans 
Educational Assistance, Pell Grants, Supplemental Educational 
Opportunity Grants, and other training allowances under any Federal law 
other than for the training of workers; and
    (3) Any amount that would be deductible from UI for days of absence 
from training under the provisions of the applicable State law which 
apply to individuals in approved training.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32349, Aug. 24, 1988]



Sec.617.14  Maximum amount of TRA.

    (a) General rule. Except as provided under paragraph (b) of this 
section, the maximum amount of TRA payable to an individual under a 
certification shall be the amount determined by:
    (1) Multiplying by 52 the weekly amount of TRA payable to such 
individual for a week of total unemployment, as determined under Sec.
617.13(a); and
    (2) Subtracting from the product derived under paragraph (a)(1) of 
this section, the total sum of UI to which the individual was entitled 
(or would have been entitled if the individual had applied therefor) in 
the individual's first benefit period described in Sec.
617.11(a)(1)(iv) or, as appropriate, Sec.617.11(a)(2)(iv). The 
individual's full entitlement shall be subtracted under this paragraph, 
without regard to the amount, if any, that was actually paid to the 
individual with respect to such benefit period.
    (b) Exceptions. The maximum amount of TRA determined under paragraph 
(a) of this section will not include:
    (1) The amount of dependents' allowances paid as a supplement to the 
base weekly amount determined under Sec.617.13(a);
    (2) The amount of the difference between the individual's weekly 
increased allowances determined under Sec.617.13(b) and the 
individual's weekly

[[Page 113]]

amount determined under Sec.617.13(a); and
    (3) The amounts paid for additional weeks determined under Sec.
617.15(b);

but nothing in this paragraph (b) shall affect an individual's 
eligibility for such supplemental, increased or additional allowances.
    (c) Reduction for Federal training allowance. (1) If a training 
allowance referred to in Sec.617.13(c)(2) is paid to an individual for 
any week of unemployment with respect to which the individual would be 
entitled (determined without regard to any disqualification under Sec.
617.18(b)(2)) to TRA, if the individual applied for TRA for such week, 
each week shall be deducted from the total number of weeks of TRA 
otherwise payable to the individual.
    (2) If the training allowance referred to in paragraph (c)(1) of 
this section is less than the amount of TRA otherwise payable to the 
individual for such week, the individual shall, when the individual 
applies for TRA for such week, be paid TRA in an amount not to exceed 
the amount equal to the difference between the individual's regular 
weekly TRA amount, as determined under Sec.617.13(a), and the amount 
of the training allowance paid to the individual for such week, as 
provided in section 232(c) of the Act.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32349, Aug. 24, 1988; 
54 FR 22277, May 23, 1989; 59 FR 931, Jan. 6, 1994]



Sec.617.15  Duration of TRA.

    (a) Basic weeks. An individual shall not be paid basic TRA for any 
week beginning after the close of the 104-week eligibility period (as 
defined in Sec.617.3(m)(1)), which is applicable to the individual as 
determined under Sec. Sec.617.3 (m)(1), 617.3(t), and 617.67(e).
    (b) Additional weeks. (1) To assist an individual to complete 
training approved under subpart C of this part, payments may be made as 
TRA for up to 26 additional weeks in the 26-week eligibility period (as 
defined in Sec.617.3(m)(2)) which is applicable to the individual as 
determined under Sec. Sec.617.3(m)(2) and 617.67(f).
    (2) To be eligible for TRA for additional weeks, an individual must 
make a bona fide application for such training--
    (i) within 210 days after the date of the first certification under 
which the individual is covered, or
    (ii) if later, within 210 days after the date of the individual's 
most recent partial or total separation (as defined in Sec. Sec.
617.3(cc) and 617.3(ll)) under such certification.
    (3) Except as provided in paragraph (d) of this section, payments of 
TRA for additional weeks may be made only for those weeks in the 26-week 
eligibility period during which the individual is actually participating 
fully in training approved under Sec.617.22(a).
    (c) Limit. The maximum TRA payable to any individual on the basis of 
a single certification is limited to the maximum amount of basic TRA as 
determined under Sec.617.14 plus additional TRA for up to 26 weeks as 
provided in paragraph (b) of this section.
    (d) Scheduled breaks in training. (1) An individual who is otherwise 
eligible will continue to be eligible for basic and additional weeks of 
TRA during scheduled breaks in training, but only if a scheduled break 
is not longer than 14 days, and the following additional conditions are 
met:
    (i) The individual was participating in the training approved under 
Sec.617.22(a) immediately before the beginning of the break; and
    (ii) The break is provided for in the published schedule or the 
previously established schedule of training issued by the training 
provider or is indicated in the training program approved for the 
worker; and, further
    (iii) The individual resumes participation in the training 
immediately after the break ends.
    (2) A scheduled break in training shall include all periods within 
or between courses, terms, quarters, semesters and academic years of the 
approved training program.
    (3) No basic or additional TRA will be paid to an individual for any 
week which begins and ends within a scheduled break that is 15 days or 
more.
    (4) The days within a break in a training program that shall be 
counted in determining the number of days of the break for the purposes 
of paragraph (d) of this section shall include all calendar days 
beginning with the first day of the break and ending with the last

[[Page 114]]

day of the break, as provided for in the schedule of the training 
provider, except that any Saturday, Sunday, or official State or 
National holiday occurring during the scheduled break in training, on 
which training would not normally be scheduled in the training program 
if there were no break in training, shall not be counted in determining 
the number of days of the break for the purposes of paragraph (d) of 
this section.
    (5) When the worker is drawing basic TRA, the maximum amount of TRA 
payable is not affected by the weeks the worker does not receive TRA 
while in a break period, but the weeks will count against the 104-week 
eligibility period.
    (6) When the worker is drawing additional weeks of TRA to complete 
training, any weeks for which TRA is not paid will count against the 
continuous 26-week eligibility period and the number of weeks payable.

[59 FR 931, Jan. 6, 1994]



Sec.617.16  Applicable State law.

    (a) What law governs. The applicable State law for any individual, 
for all of the purposes of this part 617, is the State law of the 
State--
    (1) In which the individual is entitled to UI (whether or not the 
individual has filed a claim therefor) immediately following the 
individual's first separation (as defined in paragraph (t)(1) of Sec.
617.3), or
    (2) If the individual is not so entitled to UI under the State law 
of any State immediately following such first separation, or is entitled 
to UI under the Railroad Unemployment Insurance Act (RRUI), the State 
law of the State in which such first separation occurred.
    (b) Change of law. The State law determined under paragraph (a) of 
this section to be the applicable State law for an individual shall 
remain the applicable State law for the individual until the individual 
becomes entitled to UI under the State law of another State (whether or 
not the individual files a claim therefor).
    (c) UI entitlement. (1) An individual shall be deemed to be entitled 
to UI under a State law if the individual satisfies the base period 
employment and wage qualifying requirements of such State law.
    (2) In the case of a combined-wage claim (Part 616 of this chapter), 
UI entitlement shall be determined under the law of the paying State.
    (3) In case of a Federal UI claim, or a joint State and Federal UI 
claim (Parts 609 and 614 of this Chapter), UI entitlement shall be 
determined under the law of the State which is the applicable State for 
such claims.
    (d) RRUI claimants. If an individual is entitled to UI under the 
Railroad Unemployment Insurance Act, the applicable State law for 
purposes of paragraphs (a) and (b) of this section is the law of the 
State in which the individual's first qualifying separation occurs.
    (e) Liable State. The State whose State law is determined under this 
section to be the applicable State law for any individual shall be the 
liable State for the individual for all purposes of this part 617. Any 
State other than the liable State shall be an agent State.

[59 FR 932, Jan. 6, 1994]



Sec.617.17  Availability and active search for work.

    (a) Extended Benefit work test applicable. Except as provided in 
paragraph (b) of this section, an individual shall, as a basic condition 
of entitlement to basic TRA for a week of unemployment--
    (1) be unemployed, as defined in the applicable State law for UI 
claimants, and
    (2) be able to work and available for work, as defined in the 
applicable State law for UI claimants, and
    (3) satisfy the Extended Benefit work test in each week for which 
TRA is claimed, as set forth in Sec. Sec.617.11(a)(1) (vi) and 
617.11(a)(2)(vi).
    (b) Exceptions--(1) Prior to November 21, 1988. The conditions 
stated in paragraphs (a) and (b) of this section shall not be applicable 
to an individual actually participating in training approved under the 
applicable State law or under Sec.617.22(a), or during a scheduled 
break in the training program if (as determined for the purposes of 
Sec.617.15 (d)) the individual participated in the training 
immediately before the beginning of the break and resumes participation 
in the training immediately

[[Page 115]]

after the break ends, unless the individual is ineligible or subject to 
disqualification under the applicable State law or Sec.617.18 (b)(2).
    (2) On and after November 21, 1988. The conditions stated in 
paragraphs (a)(2) and (a)(3) of this section shall not be applicable to 
an individual who is enrolled in or participating in a training program 
approved under Sec.617.22 (a), or during a break in the training 
program if (as determined for the purposes of Sec.617.15(d)) the 
individual participated in the training immediately before the beginning 
of the break and resumes participation in the training immediately after 
the break ends.

[59 FR 932, Jan. 6, 1994]



Sec.617.18  Disqualifications.

    (a) State law applies. Except as stated in paragraph (b) of this 
section and Sec.617.55(b), an individual shall not be paid TRA for any 
week of unemployment the individual is or would be disqualified to 
receive UI under the disqualification provisions of the applicable State 
law, including the provisions of the applicable State law which apply to 
EB claimants and which are consistent with section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970.
    (b) Disqualification of trainees--(1) State law inapplicable. A 
State law shall not be applied to disqualify an individual from 
receiving either UI or TRA because the individual:
    (i) Is enrolled in or is participating in a training program 
approved under Sec.617.22(a); or
    (ii) Refuses work to which the individual has been referred by the 
State agency, if such work would require the individual to discontinue 
training, or if added to hours of training would occupy the individual 
more than 8 hours a day or 40 hours a week, except that paragraph 
(b)(1)(ii) of this section shall not apply to an individual who is 
ineligible under paragraph (b)(2) of this section; or
    (iii) Quits work, if the individual was employed in work which was 
not suitable (as defined in Sec.617.22(a)(1)), and it was reasonable 
and necessary for the individual to quit work to begin or continue 
training approved for the individual under Sec.617.22(a).
    (2) Trainees ineligible. (i) An individual who, without justifiable 
cause, fails to begin participation in a training program which is 
approved under Sec.617.22(a), or ceases to participate in such 
training, or for whom a waiver is revoked pursuant to Sec.617.19(c), 
shall not be eligible for basic TRA, or any other payment under this 
part 617, for the week in which such failure, cessation, or revocation 
occurred, or any succeeding week thereafter until the week in which the 
individual begins or resumes participation in a training program that is 
approved under Sec.617.22(a).
    (ii) For purposes of this section and other provisions of this Part 
617, the following definitions shall be used:
    (A) Failed to begin participation. A worker shall be determined to 
have failed to begin participation in a training program when the worker 
fails to attend all scheduled training classes and other training 
activities in the first week of the training program, without 
justifiable cause.
    (B) Ceased participation. A worker shall be determined to have 
ceased participation in a training program when the worker fails to 
attend all scheduled training classes and other training activities 
scheduled by the training institution in any week of the training 
program, without justifiable cause.
    (C) Justifiable cause. For the purposes of paragraph (b)(2) of this 
section, the term ``justifiable cause'' means such reasons as would 
justify an individual's conduct when measured by conduct expected of a 
reasonable individual in like circumstances, including but not limited 
to reasons beyond the individual's control and reasons related to the 
individual's capability to participate in or complete an approved 
training program.
    (c) Disqualification while in OJT. In no case may an individual 
receive TRA for any week with respect to which the worker is engaged in 
on-the-job training.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32350, Aug. 24, 1988; 
59 FR 932, Jan. 6, 1994]



Sec.617.19  Requirement for participation in training.

    (a) In general--(1) Basic requirement. (i) All individuals otherwise 
entitled to

[[Page 116]]

basic TRA, for each week, must either be enrolled in or participating in 
a training program approved under Sec.617.22(a), or have completed a 
training program approved under Sec.617.22(a), as provided in Sec.
617.11(a)(2)(vii), in order to be entitled to basic TRA payments for any 
such week (except for continuation of payments during scheduled breaks 
in training of 14 days or less under the conditions stated in Sec.
617.15(d)). The training requirement of paragraph (a)(1)(i) of this 
section shall be waived in writing on an individual basis, solely in 
regard to entitlement to basic TRA, if approval of training for the 
individual is not feasible or is not appropriate, as determined in 
accordance with paragraph (a)(2) of this section.
    (ii) As a principal condition of entitlement to additional TRA 
payments, all individuals must actually be participating in a training 
program approved under Sec.617.22(a) for each week, and for all weeks 
beginning on and after November 21, 1988 (except for continuation of 
payments during breaks in training under the conditions stated in Sec.
617.15(d)). Paragraph (a)(2) of this section is not applicable in regard 
to additional TRA, and the participation in training requirement of 
paragraph (a)(1)(ii) of this section may not be waived under any 
circumstances.
    (2) Waiver of participation requirement. When it is determined, in 
accordance with paragraph (a)(2) of this section, that it is not 
feasible or is not appropriate (as such terms are defined in paragraph 
(b) of this section) to approve a training program for an individual 
otherwise entitled to basic TRA, the individual shall be furnished a 
formal written notice of waiver, with an explanation of the reason(s) 
for the waiver and a statement of why training is not feasible or is not 
appropriate in the case of such individual. At a minimum, the written 
statement furnished to the individual shall contain information required 
by Sec.617.50(e) as well as the following information:
    (i) Name and social security number of the individual;
    (ii) Petition number under which the worker was certified;
    (iii) A statement why the agency has determined that it is not 
feasible or is not appropriate to approve training for the individual at 
that time, and the reason(s) for the finding;
    (iv) A statement that the waiver will be revoked at any time that 
feasible and appropriate training becomes available;
    (v) Any other advice or information the State agency deems 
appropriate in informing the individual;
    (vi) Signature block (with signature) for the appropriate State 
official; and
    (vii) Signature block (with signature) for the worker's 
acknowledgement of receipt.
    (3) Denial of a waiver. In any case in which a determination is made 
to deny to any individual a waiver of the participation requirement, the 
individual shall be furnished a formal written notice of denial of 
waiver, which shall contain all of the information required of formal 
written notices under paragraph (a)(2) of this section.
    (4) Procedure. Any determination under paragraph (a)(2) or paragraph 
(a)(3) of this section shall be a determination to which Sec. Sec.
617.50 and 617.51 apply, including the requirement that any written 
notice furnished to an individual shall include notice of the 
individual's appeal rights as is provided in Sec.617.50(e).
    (b) Reasons for issuing a waiver. (1) For the purposes of paragraphs 
(a)(2) and (a)(3) of this section, a waiver of the participation in 
training requirement shall be issued to an individual only upon a 
supported finding that approval of a Sec.617.22(a) training program 
for that individual is not feasible or is not appropriate at that time.
    (i) Feasible and appropriate. For the purposes of this section:
    (A) Feasible. The term feasible means:
    (1) Training is available at that time which meets all the criteria 
of Sec.617.22(a);
    (2) The individual is so situated as to be able to take full 
advantage of the training opportunity and complete the training; and
    (3) Funding is available to pay the full costs of the training and 
any transportation and subsistence expenses which are compensable. The 
funding referred to in paragraph (b)(1)(i)(A)(3) of this section 
includes not only TAA program funds but also all other funds available 
under any of the provisions of

[[Page 117]]

the Title I, Subchapter B of the Workforce Investment Act or any other 
Federal, State or private source that may be utilized for training 
approvable under Sec.617.22(a). Further, the individual's situation in 
respect to undertaking training (as referred to in paragraph 
(b)(1)(i)(A)(2) of this section) shall include taking into account 
personal circumstances that preclude the individual from being able to 
participate in and complete the training program, such as the 
availability of transportation, the ability to make arrangements for 
necessary child care, and adequate financial resources if the weeks of 
training exceeds the duration of UI and TRA payments.
    (B) Appropriate. The term appropriate means being suitable or 
compatible, fitting, or proper. Appropriate, therefore, refers to 
suitability of the training for the worker (including whether there is a 
reasonable prospect which is reasonably foreseeable that the individual 
will be reemployed by the firm from which separated), and compatibility 
of the training for the purposes of the TAA Program. In these respects, 
suitability of training for the individual is encompassed within the 
several criteria in Sec.617.22 (a), and compatibility with the program 
is covered by the various provisions of subpart C of this part which 
describe the types of training approvable under Sec.617.22(a) and the 
limitations thereon.
    (ii) Basis for application. Whether training is feasible or 
appropriate at any given time is determined by finding whether, at that 
time, training suitable for the worker is available, the training is 
approvable under subpart C of this part including the criteria in Sec.
617.22(a), the worker is so situated as to be able to take full 
advantage of the training and satisfactorily complete the training, full 
funding for the training is available from one or more sources in 
accordance with Sec. Sec.617.24 and 617.25, the worker has the 
financial resources to complete the training when the duration of the 
training program exceeds the worker's eligibility for TRA, and the 
training will commence within 30 days of approval.
    (2) Particular applications. The reasons for any determination that 
training is not feasible or is not appropriate shall be in accord with 
the following:
    (i) Not feasible because--
    (A) The beginning date of approved training is beyond 30 days, as 
required by the definition for ``Enrolled in training'' in Sec.
617.11(a)(2)(vii)(D),
    (B) Training is not reasonably available to the individual,
    (C) Training is not available at a reasonable cost,
    (D) Funds are not available to pay the total costs of training, or
    (E) Personal circumstances such as health or financial resources, 
preclude participation in training or satisfactory completion of 
training,
    (F) Other (explain).
    (ii) Not appropriate because--
    (A)(1) The firm from which the individual was separated plans to 
recall the individual within the reasonably foreseeable future (State 
agencies must verify planned recalls with the employer),
    (2) Planned recall. For the purpose of determining whether the 
recall or reemployment of an individual is reasonably foreseeable (for 
the purposes of this section and Sec.617.22), either a specific or 
general type of recall (as set out) shall be deemed to be sufficient.
    (i) Specific recall. A specific recall is where an individual or 
group of individuals who was separated from employment is identified and 
notified by the employer to return to work within a specified time 
period.
    (ii) General recall. A general recall is where the employer 
announces an intention to recall an individual or group of individuals, 
or by other action reasonably signals an intent to recall, without 
specifying any certain date or specific time period.
    (iii) Reasonably foreseeable. For purposes of determining whether 
training should be denied and a training waiver granted, because of a 
planned recall that is reasonably foreseeable, such a planned recall 
includes a specific recall and also includes a general recall (as 
defined in paragraph (b)(2)(ii)(A)(2) of this section) if the general 
recall in each individual's case is reasonably expected to occur before 
the individual exhausts eligibility for any regular UI payments for 
which the individual is or may become entitled. A general recall,

[[Page 118]]

in which the timing of the recall is reasonably expected to occur after 
the individual's exhaustion of any regular UI to which the individual is 
or may become entitled, shall not be treated as precluding approval of 
training, but shall be treated as any other worker separation for these 
purposes.
    (B) The duration of training suitable for the individual exceeds the 
individual's maximum entitlement to basic and additional TRA payments 
and the individual cannot assure financial responsibility for completing 
the training program,
    (C) The individual possesses skills for ``suitable employment'' and 
there is a reasonable expectation of employment in the foreseeable 
future, or
    (D) Other (explain).
    (3) Waivers and able and available. An individual who has been 
furnished a written notice of waiver under paragraph (a)(2) of this 
section (or denial of waiver under paragraph (a)(3) of this section) 
shall be subject to all of the requirements of Sec.617.17(a), which 
shall continue until the individual is enrolled in a training program as 
required by paragraph (a)(2)(vii) of Sec.617.11.
    (c) Waiver review and revocations. (1) State agencies must have a 
procedure for reviewing regularly (i.e., every 30 days or less) all 
waivers issued under this section to individuals, to ascertain that the 
conditions upon which the waivers were granted continue to exist. In any 
case in which the conditions have changed--i.e., training has become 
feasible and appropriate--then the waiver must be revoked, and a written 
notice of revocation shall be furnished to the individual involved.
    (2) In addition to the periodic reviews required by paragraph (c)(1) 
of this section, State agencies must have a procedure for revoking 
waivers in individual cases promptly whenever a change in circumstances 
occurs. For example, a written notice of revocation shall be issued to 
the individual concurrent with the approval of the training in which the 
individual has enrolled (if such training is scheduled to commence 
within 30 days), and shall not be issued prior to such approval.
    (3) State agencies may incorporate a revocation section in the 
waiver form or on a separate revocation form. Any determination under 
paragraph (c) of this section shall be a determination to which 
Sec. Sec.617.50 and 617.51 apply. The information included in a 
written notice of revocation issued under this paragraph (c) shall 
include all of the information required for written notices issued under 
paragraph (a)(2) of this section.
    (d) Recordkeeping and reporting. (1) State agencies must develop 
procedures for compiling and reporting on the number of waivers issued 
and revoked, by reason, as specified in paragraphs (b) and (c) of this 
section, and report such data to the Department of Labor as requested by 
the Department.
    (2) State agencies are not required to forward copies of individual 
waiver and revocation notices to the Department of Labor, unless 
specifically requested by the Department. However, each State agency 
shall retain a copy of every individual waiver and revocation notice 
issued by the State, for such period of time as the Department requires.

(Approved by the Office of Management and Budget under control number 
1205-0016)

[59 FR 932, Jan. 6, 1994, as amended at 71 FR 35515, June 21, 2006]



                     Subpart C_Reemployment Services



Sec.617.20  Responsibilities for the delivery of reemployment services.

    (a) State agency referral. Cooperating State agencies shall be 
responsible for:
    (1) Advising each adversely affected worker to apply for training 
with the State agency responsible for reemployment services, while the 
worker is receiving UI payments, and at the time the individual files an 
initial claim for TRA; and
    (2) Referring each adversely affected worker to the State agency 
responsible for training and other reemployment services in a timely 
manner.
    (b) State agency responsibilities. The responsibilities of 
cooperating State agencies under subpart C of this part include, but are 
not limited to:
    (1) Interviewing each adversely affected worker regarding suitable 
training opportunities reasonably available

[[Page 119]]

to each individual under subpart C of this part, reviewing such 
opportunities with each individual, informing each individual of the 
requirement for participation in training as a condition for receiving 
TRA, and accepting each individual's application for training. Such 
training may be approved for any adversely affected worker at any time 
after a certification is issued and the worker is determined to be 
covered without regard to whether the worker has exhausted all rights to 
unemployment insurance;
    (2) Registering adversely affected workers for work;
    (3) Informing adversely affected workers of the reemployment 
services and allowances available under the Act and this Part 617, the 
application procedures, the filing date requirements for such 
reemployment services and the training requirement for receiving TRA;
    (4) Determining whether suitable employment, as defined in Sec.
617.22(a)(1), is available;
    (5) Providing counseling, testing, placement, and supportive 
services;
    (6) Providing or procuring self-directed job search training, when 
necessary;
    (7) Providing training, job search and relocation assistance;
    (8) Developing a training plan with the individual;
    (9) Determining which training institutions offer training programs 
at a reasonable cost and with a reasonable expectation of employment 
following the completion of such training, and procuring such training;
    (10) Documenting the standards and procedures used to select 
occupations and training institutions in which training is approved;
    (11) Making referrals and approving training programs;
    (12) Monitoring the progress of workers in approved training 
programs;
    (13) Developing, and periodically reviewing and updating 
reemployment plans for adversely affected workers;
    (14) Developing and implementing a procedure for reviewing training 
waivers and revocations at least every 30 days to determine whether the 
conditions under which they are issued have changed; and
    (15) Coordinating the administration and delivery of employment 
services, benefits, training, and supplemental assistance for adversely 
affected workers with programs under the Act and under Title I, 
Subchapter B of the Workforce Investment Act.

[59 FR 934, Jan. 6, 1994, as amended at 71 FR 35515, June 21, 2006]



Sec.617.21  Reemployment services and allowances.

    Reemployment services and allowances shall include, as appropriate, 
the services and allowances as set forth in this section, provided that 
those services included within the scope of paragraphs (a) through (e) 
of this section shall be provided for under any other Federal law other 
than the Act.
    (a) Employment registration. To ensure, so far as practical, that 
individuals are placed in jobs which utilize their highest skills and 
that applicants qualified for job openings are appropriately referred, 
applications for registration shall be taken on adversely affected 
workers who apply for reemployment services.
    (b) Employment counseling. When local job opportunities are not 
readily available, counseling shall be used to assist individuals to 
gain a better understanding of themselves in relation to the labor 
market so that they can more realistically choose or change an 
occupation or make a suitable job adjustment.
    (c) Vocational testing. Testing shall be used to determine which 
individual skills or potentials can be developed by appropriate 
training.
    (d) Job development. A State agency shall develop jobs for 
individuals by soliciting job interviews from public or private 
employers and shall work with potential employers to customize or 
restructure particular jobs to meet individual needs.
    (e) Supportive services. Supportive services shall be provided so 
individuals can obtain or retain employment or participate in employment 
and training programs leading to eventual placement in permanent 
employment. Such services may include work orientation, basic education, 
communication skills, child care, and any other

[[Page 120]]

services necessary to prepare an individual for full employment in 
accordance with the individual's capabilities and employment 
opportunities.
    (f) On-the-job training (OJT). OJT is training, in the public or 
private sector, and may be provided to an individual who meets the 
conditions for approval of training, as provided in Sec.617.22(a), and 
who has been hired by the employer, while the individual is engaged in 
productive work which provides knowledge or skills essential to the full 
and adequate performance of the job.
    (g) Classroom training. This training activity is any training of 
the type normally conducted in a classroom setting, including vocational 
education, and may be provided to individuals when the conditions for 
approval of training are met, as provided in Sec.617.22(a), to impart 
technical skills and information required to perform a specific job or 
group of jobs. Training designed to enhance the employability of 
individuals by upgrading basic skills, through the provision of courses 
such as remedial education or English-as-a-second-language, shall be 
considered as remedial education approvable under Sec.617.22(a) if the 
criteria for approval of training under Sec.617.22(a) are met.
    (h) Self-directed job search. Self-directed job search programs 
shall be initiated to assist individuals in developing skills and 
techniques for finding a job. Such programs vary in design and operation 
and call for a carefully structured approach to individual needs. There 
are basic elements or activities common to all approaches. These 
include:
    (1) Job search workshop. A short (1-3 days) seminar designed to 
provide participants with knowledge on how to find jobs, including labor 
market information, applicant resume writing, interviewing techniques, 
and finding job openings.
    (2) Job finding club. Encompasses all elements of the Job Search 
Workshop plus a period (1-2 weeks) of structured, supervised application 
where participants actually seek employment.
    (i) Job search allowances. The individual, if eligible, shall be 
provided job search allowances under subpart D of this part 617 to 
defray the cost of seeking employment outside of the commuting area.
    (j) Relocation allowances. The individual, if eligible, shall be 
provided relocation allowances under subpart E of this part 617 to 
defray the cost of moving to a new job outside of the commuting area.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 934, Jan. 6, 1994]



Sec.617.22  Approval of training.

    (a) Conditions for approval. Training shall be approved for an 
adversely affected worker if the State agency determines that:
    (1) There is no suitable employment (which may include technical and 
professional employment) available for an adversely affected worker.
    (i) This means that for the worker for whom approval of training is 
being considered under this section, no suitable employment is available 
at that time for that worker, either in the commuting area, as defined 
in Sec.617.3(k), or outside the commuting area in an area in which the 
worker desires to relocate with the assistance of a relocation allowance 
under subpart E of this part, and there is no reasonable prospect of 
such suitable employment becoming available for the worker in the 
foreseeable future. For the purposes of paragraph (a)(1) of this section 
only, the term ``suitable employment'' means, with respect to a worker, 
work of a substantially equal or higher skill level than the worker's 
past adversely affected employment, and wages for such work at not less 
that 80 percent of the worker's average weekly wage.
    (2) The worker would benefit from appropriate training. (i) This 
means that there is a direct relationship between the needs of the 
worker for skills training or remedial education and what would be 
provided by the training program under consideration for the worker, and 
that the worker has the mental and physical capabilities to undertake, 
make satisfactory progress in, and complete the training. This includes 
the further criterion that the individual will be job ready on 
completion of the training program.
    (3) There is a reasonable expectation of employment following 
completion of such

[[Page 121]]

training. (i) This means that, for that worker, given the job market 
conditions expected to exist at the time of the completion of the 
training program, there is, fairly and objectively considered, a 
reasonable expectation that the worker will find a job, using the skills 
and education acquired while in training, after completion of the 
training. Any determination under this criterion must take into account 
that ``a reasonable expectation of employment'' does not require that 
employment opportunities for the worker be available, or offered, 
immediately upon the completion of the approved training. This 
emphasizes, rather than negates, the point that there must be a fair and 
objective projection of job market conditions expected to exist at the 
time of completion of the training.
    (4) Training approved by the Secretary is reasonably available to 
the worker from either governmental agencies or private sources (which 
may include area vocational technical education schools, as defined in 
Carl D. Perkins Vocational and Applied Technology Education Act, and 
employers). (i) This means that training is reasonably accessible to the 
worker within the worker's commuting area at any governmental or private 
training (or education) provider, particularly including on-the-job 
training with an employer, and it means training that is suitable for 
the worker and meets the other criteria in paragraph (a) of this 
section. It also means that emphasis must be given to finding accessible 
training for the worker, although not precluding training outside the 
commuting area if none is available at the time within the worker's 
commuting area. Whether the training is within or outside the commuting 
area, the training must be available at a reasonable cost as prescribed 
in paragraph (a)(6) of this section.
    (ii) In determining whether or not training is reasonably available, 
first consideration shall be given to training opportunities available 
within the worker's normal commuting area. Training at facilities 
outside the worker's normal commuting area should be approved only if 
such training is not available in the area or the training to be 
provided outside the normal commuting area will involve less charges to 
TAA funds.
    (5) The worker is qualified to undertake and complete such training. 
(i) This emphasizes the worker's personal qualifications to undertake 
and complete approved training. Evaluation of the worker's personal 
qualifications must include the worker's physical and mental 
capabilities, educational background, work experience and financial 
resources, as adequate to undertake and complete the specific training 
program being considered.
    (ii) Evaluation of the worker's financial ability shall include an 
analysis of the worker's remaining weeks of UI and TRA payments in 
relation to the duration of the training program. If the worker's UI and 
TRA payments will be exhausted before the end of the training program, 
it shall be ascertained whether personal or family resources will be 
available to the worker to complete the training. It must be noted on 
the worker's record that financial resources were discussed with the 
worker before the training was approved.
    (iii) When adequate financial resources will not be available to the 
worker to complete a training program which exceeds the duration of UI 
and TRA payments, the training shall not be approved and consideration 
shall be given to other training opportunities available to the worker.
    (6) Such training is suitable for the worker and available at a 
reasonable cost. (i) Such training means the training being considered 
for the worker. Suitable for the worker means that paragraph (a)(5) of 
this section is met and that the training is appropriate for the worker 
given the worker's capabilities, background and experience.
    (ii) Available at a reasonable cost means that training may not be 
approved at one provider when, all costs being considered, training 
substantially similar in quality, content and results can be obtained 
from another provider at a lower total cost within a similar time frame. 
It also means that training may not be approved when the costs of the 
training are unreasonably high in comparison with the average costs of 
training other workers in similar occupations at other providers.

[[Page 122]]

This criterion also requires taking into consideration the funding of 
training costs from sources other than TAA funds, and the least cost to 
TAA funding of providing suitable training opportunities to the worker. 
Greater emphasis will need to be given to these elements in determining 
the reasonable costs of training, particularly in view of the 
requirements in Sec.617.11(a) (2) and (3) that TRA claimants be 
enrolled in and participate in training.
    (iii) For the purpose of determining reasonable costs of training, 
the following elements shall be considered:
    (A) Costs of a training program shall include tuition and related 
expenses (books, tools, and academic fees), travel or transportation 
expenses, and subsistence expenses;
    (B) In determining whether the costs of a particular training 
program are reasonable, first consideration must be given to the lowest 
cost training which is available within the commuting area. When 
training, substantially similar in quality, content and results, is 
offered at more than one training provider, the lowest cost training 
shall be approved; and
    (C) Training at facilities outside the worker's normal commuting 
area that involves transportation or subsistence costs which add 
substantially to the total costs shall not be approved if other 
appropriate training is available.
    (b) Allowable amounts for training. In approving a worker's 
application for training, the conditions for approval in paragraph (a) 
of this section must be found to be satisfied, including assurance that 
the training is suitable for the worker, is at the lowest reasonable 
cost, and will enable the worker to obtain employment within a 
reasonable period of time. An application for training shall be denied 
if it is for training in an occupational area which requires an 
extraordinarily high skill level and for which the total costs of the 
training are substantially higher than the costs of other training which 
is suitable for the worker.
    (c) Previous approval of training under State law. Training 
previously approved for a worker under State law or other authority is 
not training approved under paragraph (a) of this section. Any such 
training may be approved under paragraph (a) of this section, if all of 
the requirements and limitations of paragraph (a) of this section and 
other provisions of Subpart C of this part are met, but such approval 
shall not be retroactive for any of the purposes of this Part 617, 
including payment of the costs of the training and payment of TRA to the 
worker participating in the training. However, in the case of a 
redetermination or decision reversing a determination denying approval 
of training, for the purposes of this Part 617 such redetermination or 
decision shall be given effect retroactive to the issuance of the 
determination that was reversed by such redetermination or decision; but 
no costs of training may be paid unless such costs actually were 
incurred for training in which the individual participated, and no 
additional TRA may be paid with respect to any week the individual was 
not actually participating in the training.
    (d) Applications. Applications for, selection for, approval of, or 
referral to training shall be filed in accordance with this subpart C 
and on forms which shall be furnished to individuals by the State 
agency.
    (e) Determinations. Selection for, approval of, or referral of an 
individual to training under this subpart C, or a decision with respect 
to any specific training or non-selection, non-approval, or non-referral 
for any reason shall be a determination to which Sec. Sec.617.50 and 
617.51 apply.
    (f) Length of training and hours of attendance. The State agency 
shall determine the appropriateness of the length of training and the 
hours of attendance as follows:
    (1) The training shall be of suitable duration to achieve the 
desired skill level in the shortest possible time;
    (2) Length of training. The maximum duration for any approvable 
training program is 104 weeks (during which training is conducted) and 
no individual shall be entitled to more than one training program under 
a single certification.
    (3) Training program. (i) For purposes of this Part 617, a training 
program may consist of a single course or group

[[Page 123]]

of courses which is designed and approved by the State agency for an 
individual to meet a specific occupational goal.
    (ii) When an approved training program involves more than one course 
and involves breaks in training (within or between courses, or within or 
between terms, quarters, semesters and academic years), all such breaks 
in training are subject to the ``14-day break in training'' provision in 
Sec.617.15(d), for purposes of receiving TRA payments. An individual's 
approved training program may be amended by the State agency to add a 
course designed to satisfy unforeseen needs of the individual, such as 
remedial education or specific occupational skills, as long as the 
length of the amended training program does not exceed the 104-week 
training limitation in paragraph (f)(2) of this section.
    (4) Full-time training. Individuals in TAA approved training shall 
attend training full time, and when other training is combined with OJT 
attendance at both shall be not less than full-time. The hours in a day 
and days in a week of attendance in training shall be full-time in 
accordance with established hours and days of training of the training 
provider.
    (g) Training of reemployed workers. Adversely affected workers who 
obtain new employment which is not suitable employment, as described in 
Sec.617.22(a)(1), and have been approved for training may elect to:
    (1) Terminate their jobs, or
    (2) Continue in full- or part-time employment, to undertake such 
training, and shall not be subject to ineligibility or disqualification 
for UI or TRA as a result of such termination or reduction in 
employment.
    (h) Fees prohibited. In no case shall an individual be approved for 
training under this subpart C for which the individual is required to 
pay a fee or tuition.
    (i) Training outside the United States. In no case shall an 
individual be approved for training under this subpart C which is 
conducted totally or partially at a location outside the United States.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32350, Aug. 24, 1988; 
59 FR 935, Jan. 6, 1994; 71 FR 35515, June 21, 2006]



Sec.617.23  Selection of training methods and programs.

    (a) State agency responsibilities. If suitable employment as 
described in Sec.617.22(a)(1), is not otherwise available to an 
individual or group of individuals, it is the responsibility of the 
State agency to explore, identify, develop and secure training 
opportunities and to establish linkages with other public and private 
agencies, Workforce Investment Boards (WIBs), employers, and Workforce 
Investment Act (WIA) service delivery area (SDA) grant recipients, as 
appropriate, which return adversely affected workers to employment as 
soon as possible.
    (b) Firm-specific retraining program. To the extent practicable 
before referring an adversely affected worker to approved training, the 
State agency shall consult with the individual's adversely affected firm 
and certified or recognized union, or other authorized representative, 
to develop a retraining program that meets the firm's staffing needs and 
preserves or restores the employment relationship between the individual 
and the firm. The fact that there is no need by other employers in the 
area for individuals in a specific occupation for which training is 
undertaken shall not preclude the development of an individual 
retraining program for such occupation with the adversely affected firm.
    (c) Methods of training. Adversely affected workers may be provided 
either one or a combination of the following methods of training:
    (1) Insofar as possible, priority will be given to on-the-job 
training, which includes related education necessary to acquire skills 
needed for a position within a particular occupation, in the firm or 
elsewhere pursuant to Sec. Sec.617.24, 617.25, and 617.26, including 
training for which the firm pays the costs. This ensures that on-the-job 
training provides the skills necessary for the individual to obtain 
employment in an occupation rather than a particular job at a specific 
site; and

[[Page 124]]

    (2) Institutional training, with priority given to providing the 
training in public area vocational education schools if it is determined 
that such schools are at least as effective and efficient as other 
institutional alternatives, pursuant to Sec. Sec.617.24, 617.25, and 
617.26.
    (d) Standards and procedures. The State agency shall document the 
standards and procedures used to select occupations and training 
institutions in which training is approved. Such occupations and 
training shall offer a reasonable expectation (not necessarily a prior 
guarantee) of employment following such training.
    (1) Standards. The State agency shall approve training in 
occupations for which an identifiable demand exists either in the local 
labor market or in other labor markets for which relocation planning has 
been implemented. If practicable, placement rates and employer reviews 
of curriculum shall be used as guides in the selection of training 
institutions.
    (2) Procedures. In determining the types of training to be provided, 
the State agency shall consult with local employers, appropriate labor 
organizations, WIBs and other WIA One-Stop partners, WIBs, local 
educational organizations, local apprenticeship programs, local advisory 
councils established under the Carl D. Perkins Vocational Education Act, 
and post-secondary institutions.
    (3) Exclusions. In determining suitable training the State agency 
shall exclude certain occupations, where:
    (i) Lack of employment opportunities exist as substantiated by job 
orders and other pertinent labor market data; or
    (ii) The occupation provides no reasonable expectation of permanent 
employment.

[51 FR 45848, Dec. 22, 1986, as amended at 71 FR 35515, June 21, 2006]



Sec.617.24  Preferred training.

    Training programs that may be approved under Sec.617.22(a) 
include, but are not limited to--
    (a) On-the-job training,
    (b) Any training program provided by a State pursuant to Title I, 
subchapter B of the Workforce Investment Act,
    (c) Any training program approved by a Workforce Investment Board 
established under the Workforce Investment Act,
    (d) Any program of remedial education,
    (e) Any training program (other than a training program described in 
paragraph (c) of Sec.617.25) for which all, or any portion, of the 
costs of training the worker are paid--
    (1) Under any other Federal or State program other than this subpart 
C, or
    (2) From any other source other than this section, but not including 
sources personal to the individual, such as self, relatives, or friends, 
and
    (f) Any other training program approved by the Department.

[59 FR 936, Jan. 6, 1994, as amended at 71 FR 35515, June 21, 2006]



Sec.617.25  Limitations on training under Subpart C of this part.

    The second sentence of amended section 236(a)(1) of the Act provides 
that an adversely affected worker shall be entitled to have payment of 
the costs of training approved under the Act paid on the worker's 
behalf, subject, however, ``to the limitations imposed by'' section 236. 
The limitations in section 236 which are implemented in this section 
concern the restrictions on approval of training which are related 
directly or indirectly to the conditions on training which are 
approvable or on the funding of training costs.
    (a) On-the-job training. The costs of on-the-job training approved 
subpart C of this part for a worker, which are paid from TAA funds, 
shall be paid in equal monthly installments. Such costs may be paid from 
TAA funds, and such training may be approved under subpart C of this 
part, however, only if the State agency determines that:
    (1) No currently employed individual is displaced by such eligible 
worker, including partial displacement such as a reduction in the hours 
of non-overtime work, wages, or employment benefits;
    (2) Such training does not impair existing contracts for services or 
collective bargaining agreements;
    (3) In the case of training which would be inconsistent with the 
terms of a collective bargaining agreement,

[[Page 125]]

written concurrence has been obtained from the concerned labor 
organization;
    (4) No other individual is on layoff from the same or any 
substantially equivalent job for which such eligible worker is being 
trained;
    (5) The employer has not terminated the employment of any regular 
employee or otherwise reduced the work force with the intention of 
filling the vacancy so created by hiring the eligible worker;
    (6) The job for which the eligible worker is being trained is not 
being created in a promotional line that will infringe in any way upon 
the promotional opportunities of currently employed individuals;
    (7) Such training is not for the same occupation from which the 
worker was separated and with respect to which such worker's group was 
certified pursuant to section 222 of the Act;
    (8) The employer certifies to the State agency that the employer 
will continue to employ the eligible worker for at least 26 weeks after 
completing the training if the worker desires to continue such 
employment and the employer does not have due cause to terminate such 
employment;
    (9) The employer has not received payment under this subpart C or 
under any other Federal law for any other on-the-job training provided 
by such employer which failed to meet the requirements of paragraphs 
(a)(1) through (a)(6) of this section or such other Federal law; and
    (10) The employer has not taken, at any time, any action which 
violated the terms of any certification described in paragraph (a)(8) of 
this section made by the employer with respect to any other on-the-job 
training provided by the employer for which the employer has received a 
payment under subpart C of this part (or the prior provisions of subpart 
C of this part).
    (b) Other authority and restrictions on funding--
    (1) In general. Section 236(a) contains several provisions which 
allow the costs of a training program approved under the Act to be 
paid--
    (i) Solely from TAA funds,
    (ii) Solely from other public or private funds, or
    (iii) Partly from TAA funds and partly from other public or private 
funds,

but also precludes the use of TAA funds or funds under another Federal 
law where such use of funds would result in duplication of payment of 
training costs. Those authorities and restrictions are spelled out in 
paragraph (b) of this section: Provided, that, private funds may not 
include funds from sources personal to the individual, such as self, 
relatives, or friends.
    (2) Section 236(a)(5)(E) of the Act. (i) In general. Paragraph 
(5)(E) of section 236(a) of the Act specifies one of the types of 
training programs approvable under the Act, as including a program 
(other than a training program described in section 236(a)(7) (paragraph 
(b)(5) of this section)) for which all, or any portion, of the costs of 
the training program are paid--
    (A) Under any Federal or State program other than the Act, or
    (B) From any source other than TAA funds.
    (ii) Application. Paragraph (E) of section 236(a)(5) of the Act thus 
authorizes prearrangements between cooperating State agencies 
administering the TAA program and the authorities administering any 
other Federal, State, or private funding source, to agree upon any mix 
of TAA funds and other funds for paying the costs of a training program 
approved under subpart C of this part. Any such prearrangement must 
contain specific commitments from the other authorities to pay the costs 
they agree to assume.
    (3) Section 236(a)(6) of the Act. (i) In general. Paragraph (6) of 
section 236(a) of the Act is related to section 236(a)(5)(E) in 
providing that the costs of a training program approved under the Act 
are not required to be paid from TAA funds to the extent that such costs 
are paid under any Federal or State program other than the Act or from 
any source other than the Act.
    (ii) Application. (A) Although paragraph (6) of section 236(a) of 
the Act is expressed in terms of the costs not being required to be paid 
from TAA funds, it authorizes the mixing of TAA funds and funds from any 
other Federal, State or private source. Therefore, sharing the future 
costs of training is authorized where prior costs

[[Page 126]]

were paid from another Federal, State or private source, but this does 
not authorize reimbursement from TAA funds of any training costs which 
were incurred and for which payment became due prior to the approval of 
the training program under subpart C of this part. In utilizing the 
authority under paragraph (b)(3) of this section for sharing training 
costs, prearrangements shall be entered into as required under paragraph 
(b)(2) of this section before any TAA funds are obligated.
    (B) Paragraph (6) of section 236(a) contains a special restriction 
on the authority derived thereunder to use TAA funds in sharing training 
costs. Therefore, before approving any training program under subpart C 
of this part, which may involve sharing of the training costs under the 
authority of paragraph (b)(3) of this section, the cooperating State 
agencies for the TAA program shall require the worker to enter into a 
written agreement with the State under which TAA funds will not be 
applied for or used to pay any portion of the costs of the training the 
worker has reason to believe will be paid by any other governmental or 
private source.
    (4) Section 236(a)(4) of the Act. (i) In general. (A) Paragraph (4) 
of section 236(a) of the Act (paragraph (3) of section 236(a) before 
August 23, 1988) continues to provide, as it did before the addition of 
paragraphs (5)(E), (6), and (7) to section 236(a), that:
    (1) When the costs of training are paid from TAA funds under subpart 
C of this part, no other payment for such costs of training may be made 
under any other Federal law; and
    (2) When the payment of the costs of training has already been made 
under any other Federal law, or the costs are reimbursable under any 
other Federal law and a portion of the costs has already been paid under 
such other Federal law, payment of such training costs may not be made 
from TAA funds.
    (B) Paragraph (4) of section 236(a) also requires that: The 
provisions of paragraphs (b)(4)(i) (A)(1) and (A)(2) of this section 
shall not apply to, or take into account, any funds provided under any 
other provision of Federal law which are used for any purpose other than 
the direct payment of the identical costs incurred in training the 
adversely affected worker under the TAA Program, even if such other use 
has the effect of indirectly paying or reducing any portion of the costs 
involved in training the adversely affected worker.
    (ii) Application. (A) Although the prohibition on duplicate payments 
in the first part of section 236(a)(4) remains fully implemented in this 
section, the second part of section 236(a)(4) on the sharing of costs 
from TAA funds and other Federal fund sources is modified by the 
explicit provisions of paragraphs (5)(E) and (6) of section 236(a), as 
set forth in paragraphs (b)(2) and (b)(3) of this section.
    (B) When the direct costs of a training program approvable under 
subpart C of this part are payable from TAA funds and are also wholly or 
partially payable under another Federal law, or under any State law or 
from private, nongovernmental sources, the TAA Program agencies shall 
establish procedures which ensure that TAA funds shall not be utilized 
to duplicate funds available from another source, but this preclusion of 
duplication does not prohibit and shall not discourage sharing of costs 
under prearrangements authorized under paragraphs (b)(2) and (b)(3) of 
this section.
    (C)(1) Therefore, pursuant to paragraph (4) of section 236(a), 
paragraph (b)(4) of this section continues to prohibit duplicate payment 
of training costs, which is consistent with the general prohibition 
expressed in subpart C of this part, against any use of TAA funds to 
duplicate payment of training costs in any circumstances. Paragraph 
(b)(4) of this section also continues to prohibit taking into account, 
in determining whether training costs are payable from TAA funds, any 
payments to the worker under any other Federal law which may have the 
effect of indirectly paying all or a portion of the training costs. Such 
indirect payments include Veterans Educational Assistance, Pell Grants, 
and Supplemental Educational Opportunity Grants, which are paid to the 
individual. However, any payments to the individual under these programs 
are deductible from TRA payable to the individual under Sec.
617.13(c)(2).

[[Page 127]]

    (2) When payments of Veterans Educational Assistance, Pell Grants, 
and Supplemental Educational Opportunity Grants are made to the training 
provider, instead of the individual, and are used for training costs, 
such payments shall be taken into account as direct payment of the 
training costs under other Federal law for the purposes of this section.
    (5) Section 236(a)(7) of the Act. (i) In general. Paragraph (7) of 
section 236(a) of the Act provides that a training program shall not be 
approved under the Act if--
    (A) all or a portion of the costs of such training program are paid 
under any nongovernmental plan or program,
    (B) the adversely affected worker has a right to obtain training or 
funds for training under such plan or program, and
    (C) such plan or program requires the worker to reimburse the plan 
or program from funds provided under the Act, or from wages paid under 
such training program, for any portion of the costs of such training 
program paid under the plan or program.
    (ii) Application. Paragraph (7) of section 236(a), which is 
implemented in paragraph (b)(5) of this section, reinforces the 
prohibition in Sec.617.22(h) against approval of a training program 
under subpart C of this part if the worker is required to pay a fee or 
tuition. The provisions of paragraph (b) and paragraph (h) of this 
section shall be given effect as prohibiting the approval under subpart 
C of this part of any training program if the worker would be requested 
or required, at any time or under any circumstances, to pay any of the 
costs of a training program, however small, from any TAA funds given to 
the worker or from any other funds belonging to the worker from any 
source whatever. Aside from this stringent limitation, however, 
paragraph (7) of section 236(a) of the Act implicitly authorizes 
training approved under this subpart C to be wholly or partly funded 
from nongovernmental (i.e., employer, union or other private) sources.

[59 FR 936, Jan. 6, 1994]



Sec.617.26  Liable and agent State responsibilities.

    (a) Liable State. The liable State means, for any individual, the 
State which administers the applicable State law (as determined under 
Sec.617.16). The liable State is responsible for making all 
determinations, redeterminations, and decisions on appeals on all claims 
for program benefits under this part 617, including waivers and 
revocations of waivers pursuant to Sec.617.19, subsistence payments 
pursuant to Sec.617.27, and transportation payments pursuant to Sec.
617.28. Upon receiving a copy of a certification issued by the 
Department, with respect to an affected firm in the State, the liable 
State also is responsible for publishing newspaper notices as provided 
in Sec.617.4(d), furnishing information and assistance to workers as 
provided in Sec.617.4, furnishing reemployment services under subparts 
C, D, and E of this part to all eligible workers covered by such 
certification, and carrying out other activities and functions required 
by the State's Agreement with the Secretary entered into pursuant to 
Sec.617.59. All determinations pertaining to any individual's 
eligibility for or entitlement to any program benefit under this part 
617 shall be subject to the provisions of Sec. Sec.617.50 and 617.51.
    (b) Agent State. Agent State means, for any individual, any State 
other than the liable State for the individual. Agent States shall be 
responsible for cooperating fully with the liable State and assisting 
the liable State in carrying out its activities and functions. These 
agent State responsibilities shall be part of the activities and 
functions undertaken by the agent States under their Agreements entered 
into pursuant to Sec.617.59. Agent State responsibilities include 
cooperating with liable States in taking applications and claims for 
TAA, providing reemployment services to certified workers in accordance 
with subparts B, C, D and E of this part, providing interstate claimants 
with TAA program information and assistance, assisting applicants or 
claimants to file claims for TAA program benefits and services, 
cooperating with the liable State by providing information needed to 
issue determinations, redeterminations, and decisions

[[Page 128]]

on appeals, and procuring and paying the cost of any approved training, 
including subsistence and transportation costs, according to 
determinations issued by the liable State.

[59 FR 938, Jan. 6, 1994]



Sec.617.27  Subsistence payments.

    (a) Eligibility. A trainee under this subpart C shall be afforded 
supplemental assistance necessary to pay costs of separate maintenance 
when the training facility is located outside the commuting area, but 
may not receive such supplemental assistance for any period for which 
the trainee receives such a payment under the Workforce Investment Act, 
or any other law, or for any day referred to under Sec.617.28(c)(3) 
pursuant to which a transportation allowance is payable to the 
individual, or to the extent the individual is entitled to be paid or 
reimbursed for such expenses from any other source.
    (b) Amount. Subsistence payments shall not exceed the lesser of:
    (1) The individual's actual per diem expenses for subsistence; or
    (2) 50 percent of the prevailing per diem rate authorized under the 
Federal travel regulations (see 41 CFR part 101-7) for the locale of the 
training.
    (c) Applications. Applications for subsistence payments shall be 
filed in accordance with this subpart C and on forms which shall be 
furnished to trainees by the State agency. Such payments shall be made 
on completion of a week of training, except that at the beginning of a 
training project a State agency may advance a payment for a week if it 
determines that such advance is necessary to enable a trainee to accept 
training. An adjustment shall be made if the amount of an advance is 
less or more than the amount to which the trainee is entitled under 
paragraph (b) of this section. A determination as to an application made 
under this section shall be subject to Sec. Sec.617.50 and 617.51.
    (d) Unexcused absences. No subsistence payment shall be made to an 
individual for any day of unexcused absence as certified by the 
responsible training facility.

[51 FR 45848, Dec. 22, 1986, as amended at 71 FR 35516, June 21, 2006]



Sec.617.28  Transportation payments.

    (a) Eligibility. A trainee under this subpart C shall be afforded 
supplemental assistance necessary to pay transportation expenses if the 
training is outside the commuting area, but may not receive such 
assistance if transportation is arranged for the trainee as part of a 
group and paid for by the State agency or to the extent the trainee 
receives a payment of transportation expenses under another Federal law, 
or to the extent the individual is entitled to be paid or reimbursed for 
such expenses from any other source.
    (b) Amount. A transportation allowance shall not exceed the lesser 
of:
    (1) The actual cost for travel by the least expensive means of 
transportation reasonably available between the trainee's home and the 
training facility; or
    (2) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations. See 41 CFR part 101-7.
    (c) Travel included. Travel for which a transportation allowance 
shall be paid includes travel:
    (1) At the beginning and end of the training program;
    (2) When the trainee fails for good cause, as described in Sec.
617.18(b)(2), to complete the training program; and
    (3) For daily commuting, in lieu of subsistence, but not exceeding 
the amount otherwise payable as subsistence for each day of commuting.
    (d) Applications. Applications for transportation payments shall be 
filed in accordance with this subpart C and on forms which shall be 
furnished to trainees by the State agency. Payments may be made in 
advance. An adjustment shall be made if the amount of an advance is less 
or more than the amount to which the trainee is entitled under paragraph 
(b) of this section. A determination as to an application made under 
this section shall be subject to Sec. Sec.617.50 and 617.51.

[[Page 129]]



Sec.617.29  Application of EB work test.

    (a) Registration for employment. Adversely affected workers who have 
exhausted all rights to UI and who otherwise qualify for TRA under Sec.
617.11, shall, except as provided in paragraph (b) of this section:
    (1) Register for work and be referred to work by the State agency in 
the same manner as required for EB claimants under the applicable State 
law provisions which are consistent with section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970; and
    (2) Be subject to the work test requirements for EB claimants under 
the applicable State law provisions which are consistent with section 
202(a)(3) of the Federal-State Extended Unemployment Compensation Act of 
1970.
    (b) Exceptions. Paragraph (a) of this section shall not apply to any 
week an individual is undergoing training approved under this subpart C.



                     Subpart D_Job Search Allowances



Sec.617.30  General.

    A job search allowance shall be granted an adversely affected worker 
to assist the individual in securing a job within the United States as 
provided in this subpart D.



Sec.617.31  Applications.

    (a) Forms. Applications for job search allowances shall be filed in 
accordance with this subpart D and on forms which shall be furnished to 
individuals by the State agency.
    (b) Submittal. An application may be submitted to a State agency at 
any time by an individual who has been totally or partially separated 
whether or not a certification covering the individual has been made. 
However, an application must be submitted to a State agency before the 
job search begins for the job search allowance to be granted, and the 
job search may not be approved until after the individual is covered 
under a certification.
    (c) Time limits. Notwithstanding paragraph (b) of this section, a 
job search allowance application may be approved only if submitted 
before:
    (1) The 365th day after the date of the certification under which 
the individual is covered, or the 365th day after the date of the 
individual's last total separation, whichever is later; or
    (2) The 182d day after the concluding date of training approved 
under subpart C of this part 617, or approved under the regulations 
superseded by this part 617.



Sec.617.32  Eligibility.

    (a) Conditions. Job search allowance eligibility requires:
    (1) A timely filed application;
    (2) Total separation from adversely affected employment at the time 
the job search commences;
    (3) Registration with the State agency which shall furnish the 
individual such reemployment services as are appropriate under subpart C 
of this part 617.
    (4) A determination by the State agency that the individual has no 
reasonable expectation of securing suitable employment in the commuting 
area, and has a reasonable expectation of obtaining suitable employment 
of long-term duration outside the commuting area and in the area where 
the job search will be conducted. For the purposes of this section, the 
term ``suitable employment'' means suitable work as defined in Sec.
617.3(kk) (1) or (2), whichever is applicable to the individual; and
    (5) Completion of the job search within a reasonable period not 
exceeding 30 days after the day on which the job search began.
    (b) Completion of job search. A job search is deemed completed when 
the individual either secures employment or has contacted each employer 
to whom referred by the State agency in connection with a job search.
    (c) Verification of employer contacts. The State agency shall verify 
contacts with employers certified by the individual.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 938, Jan. 6, 1994]



Sec.617.33  Findings required.

    (a) Findings by liable State. Before final payment of a job search 
allowance may be approved, the following

[[Page 130]]

findings shall be made by the liable State:
    (1) The individual meets the eligibility requirements for a job 
search allowance specified in Sec.617.32(a) (1) through (4);
    (2) The application for a job search allowance was submitted by the 
individual within the time limits specified in Sec.617.31(c); and
    (3) The individual completed the job search within the time limits 
stated in Sec.617.32(a)(5), and the requirements of paragraphs (b) and 
(c) of Sec.617.32 have been met.
    (b) Agent State. (1) When an individual files an application for a 
job search allowance with respect to a job search conducted in a State 
other than the liable State, the State agency of the State in which the 
individual conducts the job search shall serve as the agent State and be 
responsible for assisting the individual in conducting the job search 
and in filing an application for a job search allowance with the liable 
State, and for assisting the liable State by furnishing to it any 
information required for the liable State's determination of the claim.
    (2) The agent State shall cooperate fully with the liable State in 
carrying out its activities and functions with regard to such 
applications.

[59 FR 938, Jan. 6, 1994]



Sec.617.34  Amount.

    (a) Computation. The amount of a job search allowance shall be 90 
percent of the total costs of each of the following allowable 
transportation and subsistence items:
    (1) Travel. The more cost effective mode of travel reasonably 
available shall be approved by using:
    (i) The actual cost of round trip travel by the most economical 
public transportation the individual reasonably can be expected to take 
from the individual's residence to the area of job search; or
    (ii) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for such 
roundtrip travel by the usual route from the individual's residence to 
the area of job search.
    (2) Lodging and meals. The cost allowable for lodging and meals 
shall not exceed the lesser of:
    (i) The actual cost to the individual of lodging and meals while 
engaged in the job search; or
    (ii) 50 percent of the prevailing per diem allowance rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
locality where the job search is conducted.
    (b) Limit. The total job search allowances paid to an individual 
under a certification may not exceed $800, regardless of the number of 
job searches undertaken by the individual. The amounts otherwise payable 
under paragraph (a) of this section shall be reduced by any amounts the 
individual is entitled to be paid or reimbursed for such expenses from 
any other source.

[51 FR 45848, Dec. 22, 1986, as amended at 51 FR 45869, Dec. 22, 1986; 
53 FR 32351, Aug. 24, 1988; 59 FR 939, Jan. 6, 1994]



Sec.617.35  Time and method of payment.

    (a) Determinations. A State agency shall promptly make and record 
determinations necessary to assure entitlement of an individual to a job 
search allowance at any time, before or after a certification covering 
the individual is made. No job search allowance may be paid or advanced 
to an individual until the State agency determines that the individual 
is covered under a certification. A State agency shall make payment as 
promptly as possible upon determining that the individual is covered 
under a certification and is otherwise eligible.
    (b) Payment. Unless paragraph (a) of this section applies, a job 
search allowance shall be paid promptly after an individual completes a 
job search and complies with paragraph (d) of this section.
    (c) Advances. A State agency may advance an individual (except an 
individual not yet covered under a certification) 60 percent of the 
estimated amount of the job search allowance payable on completion of 
the job search, but not exceeding $360, within 5 days prior to 
commencement of a job search. Such advance shall be deducted from any 
payment under paragraph (b) of this section.

[[Page 131]]

    (d) Worker evidence. On completion of a job search, the individual 
shall certify on forms furnished by the State agency as to employer 
contacts made and amounts expended daily for lodging and meals. Receipts 
shall be required for all lodging and purchased transportation expenses 
incurred by the individual pursuant to the job search. An adjustment 
shall be made if the amount of an advance is less or more than the 
amount to which the individual is entitled under Sec.617.34.



                     Subpart E_Relocation Allowances



Sec.617.40  General.

    A relocation allowance shall be granted an adversely affected worker 
to assist the individual and the individual's family, if any, to 
relocate within the United States as stated in this subpart E. A 
relocation allowance may be granted an individual only once under a 
certification. A relocation allowance shall not be granted to more than 
one member of a family with respect to the same relocation. If 
applications for a relocation allowance are made by more than one member 
of a family as to the same relocation, the allowance shall be paid to 
the head of the family if otherwise eligible.



Sec.617.41  Applications.

    (a) Forms. Applications for a relocation allowance shall be filed in 
accordance with this subpart E and on forms which shall be furnished by 
the State agency.
    (b) Submittal. An application may be submitted to the State agency 
at any time by an individual who has been totally or partially separated 
regardless of whether a certification covering the individual has been 
made. However, an application must be submitted to a State agency before 
the relocation begins for the relocation allowance to be granted, and 
the relocation may not be approved until after the individual is covered 
under a certification.
    (c) Time limits. Notwithstanding paragraph (b) of this section, an 
application for a relocation allowance may not be approved unless 
submitted before:
    (1) The 425th day after the date of the certification under which 
the individual is covered, or the 425th day after the date of the 
individual's last total separation, whichever is later; or
    (2) The 182d day after the concluding date of training approved 
under subpart C of this part 617, or approved under the regulations 
superseded by this part 617.



Sec.617.42  Eligibility.

    (a) Conditions. Eligibility for a relocation allowance requires:
    (1) A timely filed application;
    (2) Total separation from adversely affected employment at the time 
relocation commences;
    (3) No prior receipt of a relocation allowance under the same 
certification;
    (4) Relocation within the United States and outside the individual's 
present commuting area;
    (5) Registration with the State agency which shall furnish the 
individual such reemployment services as are appropriate under subpart C 
of this part 617;
    (6) A determination by the State agency that the individual has no 
reasonable expectation of securing suitable employment in the commuting 
area, and has obtained suitable employment affording a reasonable 
expectation of employment of long-term duration, or a bona fide offer of 
such suitable employment, outside the commuting area and in the area of 
intended relocation. For the purposes of this section, the term 
``suitable employment'' means suitable work as defined in Sec.
617.3(kk) (1) and (2), whichever is applicable to the individual; and
    (7) Relocation beginning within a reasonable period, as determined 
under Sec.617.43(b), and completion of such relocation within a 
reasonable period of time as determined in accordance with Federal 
travel regulations and Sec.617.43(a).
    (b) Job search. Applications for a relocation allowance and a job 
search allowance may not be approved concurrently, but the prior payment 
of a job search allowance shall not otherwise preclude the payment of a 
relocation allowance.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 939, Jan. 6, 1994]

[[Page 132]]



Sec.617.43  Time of relocation.

    (a) Applicable considerations. In determining whether an 
individual's relocation is completed in a reasonable period of time, a 
State agency, among other factors, shall consider whether:
    (1) Suitable housing is available in the area of relocation;
    (2) The individual can dispose of the individual's residence;
    (3) The individual or a family member is ill; and
    (4) A member of the individual's family is attending school and when 
the member can best be transferred to a school in the area of 
relocation.
    (b) Time limits. The reasonable period for actually beginning a 
relocation move shall expire 182 days after the date of application for 
a relocation allowance, or 182 days after the conclusion of training 
approved under subpart C of this part 617, or approved under the 
regulations in former 29 CFR part 91, in effect prior to its 
redesignation as this 20 CFR part 617 and its concurrent revision.



Sec.617.44  Findings required.

    (a) Findings by liable State. Before final payment of a relocation 
allowance may be approved, the following findings shall be made by the 
liable State:
    (1) The individual meets the eligibility requirements for a 
relocation allowance specified in Sec.617.42(a) (1) to (6) and Sec.
617.42(b).
    (2) The application for a relocation allowance was submitted by the 
individual within the time limits specified in Sec.617.41(c);
    (3) The individual began and completed the relocation within the 
limitations specified in Sec.617.42(a)(7) and Sec.617.43; and
    (4) The liable State has verified (directly or through the agent 
State) with the employer, and finds, that the individual has obtained 
suitable employment affording a reasonable expectation of employment of 
long-term duration, or a bona fide offer of such suitable employment, in 
the area of intended relocation, in accordance with Sec.617.42(a)(6).
    (b) Agent State. (1) When an individual relocates in a State other 
than the liable State, the State agency of the State in which the 
individual relocates shall serve as the agent State and be responsible 
for:
    (i) Assisting the individual in relocating to the State, and in 
filing an application for a relocation allowance with the liable State, 
and
    (ii) Assisting the liable State by furnishing to it any information 
required for the liable State's determination on the claim.
    (2) The agent State shall cooperate with the liable State in 
carrying out its activities and functions with regard to such 
applications. When requested by the liable State, the agent State shall 
verify with the employer and report to the liable State whether the 
individual has obtained suitable employment affording a reasonable 
expectation of employment of long-term duration, or a bona fide offer of 
such suitable employment.

[59 FR 939, Jan. 6, 1994]



Sec.617.45  Amount.

    (a) Items allowable. The amount payable as a relocation allowance 
shall include the following items:
    (1) 90 percent of the travel expenses for the individual and family, 
if any, from the individual's place of residence to the area of 
relocation, as determined under Sec.617.46;
    (2) 90 percent of the expenses of moving household goods and 
personal effects of the individual and family, if any, not to exceed the 
maximum number of pounds net weight authorized under the Federal travel 
regulations (see 41 CFR part 101-7), between such locations, as 
determined under Sec.617.47; and
    (3) A lump sum payment, equal to 3 times the individual's average 
weekly wage, not to exceed $800.
    (b) Reduction. The amount otherwise payable under paragraphs (a)(1) 
and (a)(2) of this section shall be reduced by any amount the individual 
is entitled to be paid or reimbursed for such expenses from any other 
source.

[51 FR 45848, Dec. 22, 1986, as amended at 51 FR 45869, Dec. 22, 1986]



Sec.617.46  Travel allowance.

    (a) Computation. The amount of travel allowance (including lodging 
and

[[Page 133]]

meals) payable under Sec.617.45(a)(1) shall be 90 percent of the total 
costs of each of the following allowable transportation and subsistence 
items:
    (1) Transportation. The more cost effective mode of transportation 
reasonably available shall be approved by using:
    (i) The actual cost of transportation for the individual and family, 
if any, by the most economical public transportation the individual and 
family reasonably can be expected to take from the individual's old 
residence to the individual's new residence in the area of relocation; 
or
    (ii) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
usually traveled route from the individual's old residence to the 
individual's new residence in the area of relocation. No additional 
mileage shall be payable for family members traveling on the same trip 
in the same vehicle.
    (2) Lodging and meals. The cost allowable for lodging and meals for 
an individual or each member of the individual's family shall not exceed 
the lesser of:
    (i) The actual cost to the individual for lodging and meals while in 
travel status; or
    (ii) 50 percent of the prevailing per diem allowance rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
locality to which the relocation is made.
    (b) Separate travel. If, for good cause, a member or members of an 
individual's family must travel separately to the individual's new 
residence, 90 percent of the total costs of such separate travel, 
computed in accordance with paragraph (a) of this section, shall be 
included in calculating the total amount the individual is entitled to 
be paid under this subpart E. For purposes of this paragraph (b), good 
cause means such reasons as would justify the family member's inability 
to relocate with the other members of the individual's family, including 
but not limited to reasons related to the family member's health, 
schooling or economic circumstances.
    (c) Limitation. In no case may the individual be paid a travel 
allowance for the individual or a member of the individual's family more 
than once in connection with a single relocation.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32351, Aug. 24, 1988]



Sec.617.47  Moving allowance.

    (a) Computation. The amount of a moving allowance payable under 
Sec.617.45(a)(2) shall be 90 percent of the total of the allowable 
costs under either (1), (2), or (3) of this paragraph, and 90 percent of 
the total allowable costs under (4) of this paragraph:
    (1) Commercial carrier. Allowable costs for moving household goods 
and personal effects of an individual and family, if any, shall not 
exceed the maximum number of pounds net weight authorized under the 
Federal travel regulations (see 41 CFR part 101-7) by commercial carrier 
from the individual's old residence to the individual's new residence in 
the area of relocation, including reasonable and necessary accessorial 
charges, by the most economical commercial carrier the individual 
reasonably can be expected to use. Before undertaking such move, the 
individual must submit to the State agency an estimate from a commercial 
carrier as to the cost thereof. Accessorial charges shall include the 
cost of insuring such goods and effects for their actual value or 
$10,000, whichever is least, against loss or damage in transit, if a bid 
from a licensed insurer is obtained by the individual and approved by 
the State agency before departure. If a State agency finds it is more 
economical to pay a carrier an extra charge to assume the responsibility 
of a common carrier for such goods and effects, 90 percent of such extra 
charge, but not exceeding $50, shall be paid in lieu of the cost of 
insurance.
    (2) Trailer or rental truck--(i) Trailer. If household goods and 
personal effects are moved by trailer, the allowable costs shall be:
    (A) If the trailer is hauled by private vehicle, the cost per mile 
for the use of the private vehicle at the prevailing mileage rate 
authorized under the Federal travel regulations (see 41 CFR part 101-7) 
for the usually traveled route from the individual's old residence to

[[Page 134]]

the individual's new residence in the area of relocation; and
    (B) lf the trailer is rented, and of the type customarily used for 
moving household goods and personal effects, the rental fee for each day 
reasonably required to complete the move; or
    (C) The actual charge if hauling is by commercial carrier,
    (ii) Rental truck. If household goods and personal effects are moved 
by rental truck of the type customarily used for moving household goods 
and personal effects, the allowable costs shall be:
    (A) The rental fee for each day reasonably required to complete the 
move; and
    (B) The necessary fuel for such rental truck paid by the individual.
    (3) House trailer. If a house trailer or mobile home was used as the 
individual's place of residence in the old area and will be so used in 
the new area, the allowable costs of moving such house trailer or mobile 
home shall be:
    (i) The commercial carrier's charges for moving the house trailer or 
mobile home;
    (ii) Charges for unblocking and reblocking;
    (iii) Ferry charges, bridge, road, and tunnel tolls, taxes, fees 
fixed by a State or local authority for permits to transport the unit in 
or through its jurisdiction, and retention of necessary flagmen; and
    (iv) The cost of insuring the house trailer or mobile home, and the 
personal effects of the individual and family, against loss or damage in 
transit, in accordance with the provisions in paragraph (a)(1) of this 
section.
    (4) Temporary storage. If temporary storage of household goods and 
personal effects is necessary, the cost of such temporary storage for a 
period not to exceed 60 days.
    (b) Travel. Payments under this section shall be in addition to 
payments for travel expenses for the individual and family, if any, 
under Sec.617.45(a)(1), except that the allowable cost for a private 
vehicle used to haul a trailer may not be paid under this section if any 
cost with respect to such private vehicle is payable under any other 
provisions of this subpart E.



Sec.617.48  Time and method of payment.

    (a) Determinations. A State agency shall promptly make and record 
determinations necessary to assure an individual's entitlement to a 
relocation allowance at any time, before or after a certification 
covering the individual is made. No relocation allowance may be paid or 
advanced to an individual until the State agency determines that the 
individual is covered under a certification. A State agency shall make 
payment as promptly as possible upon determining that the individual is 
covered under a certification and is otherwise eligible.
    (b) Travel and moving allowances. Allowances computed under 
Sec. Sec.617.46 and 617.47 shall be paid as follows:
    (1) Travel--(i) Transportation and subsistence. The amounts 
estimated under Sec.617.46 at 90 percent of the lowest allowable costs 
shall be paid in advance at the time an individual departs from the 
individual's residence to begin relocation or within 10 days prior 
thereto. An amount payable for a family member approved for separate 
travel shall be paid to the individual at the time of such family 
member's departure or within 10 days prior thereto.
    (ii) Worker evidence. On completion of a relocation, the individual 
shall certify on forms furnished by the State agency as to the amount 
expended daily for lodging and meals. Receipts shall be required for all 
lodging and purchased transportation expenses incurred by the individual 
and family, if any, pursuant to the relocation. An adjustment shall be 
made if the amount of an advance is less or more than the amount to 
which the individual is entitled under Sec.617.46.
    (2) Moving. The amount estimated under Sec.617.47 at 90 percent of 
the lowest allowable costs shall be paid:
    (i) Commercial carrier. (A) If household goods and personal effects 
are moved by commercial carrier, 90 percent of the amount of the 
estimate submitted by the individual under Sec.617.47(a)(1) and 
approved by the State agency for covering the cost of such move, and 90 
percent of the other charges approved by the State agency under Sec.
617.47(a)(1) shall be advanced by check or checks payable to the carrier 
and insurer, and delivered to the individual at the time

[[Page 135]]

of the scheduled shipment or within 10 days prior thereto. On completion 
of the move, the individual shall promptly submit to the State agency a 
copy of the bill of lading prepared by the carrier, including a receipt 
evidencing payment of moving costs. The individual shall with such 
submittal reimburse the State agency the amount, if any, by which the 
advance made under this paragraph (b)(2)(i) exceeds 90 percent of the 
actual moving costs approved by the State agency. The individual shall 
be paid the difference if the amount advanced was less than 90 percent 
of the actual moving costs approved by the State agency.
    (B) If more economical, a State agency may make direct arrangements 
for moving and insuring an individual's household goods and personal 
effects with a carrier and insurer selected by the individual and may 
make payment of 90 percent of moving and insurance costs directly to the 
carrier and insurer. No such arrangement shall release a carrier from 
liability otherwise provided by law or contract for loss or damage to 
the individual's goods and effects. The United States shall not be or 
become liable to either party for personal injury or property loss 
damage under any circumstances.
    (ii) Trailer or rental truck--(A) Private vehicle with trailer. If 
the move is by private vehicle and trailer, the allowable cost for the 
use of the private vehicle shall be made at the time payment is made 
under paragraph (b)(1) of this section.
    (B) Rental trailer or rental truck. If the move is by rental trailer 
or rental truck:
    (1) The individual shall submit an estimate of the rental cost from 
the rental agency; and
    (2) 90 percent of such estimated rental cost may be advanced by 
check payable to the order of the individual and the rental agency at 
the time payment is made under paragraph (b)(1) of this section; and
    (3) On completion of the move the individual shall submit promptly 
to the State agency a receipted bill itemizing and evidencing payment of 
the rental charges for the trailer or truck and fuel costs, and shall 
reimburse the State agency for the amount, if any, by which the advance 
made for the trailer or truck exceeds 90 percent of the rental charges 
approved by the State agency. If the amount of the advance was less than 
90 percent of the rental charges, the individual shall be paid the 
difference.
    (iii) House trailer. If a house trailer or mobile home is moved by 
commercial carrier, the individual shall submit to the State agency an 
estimate of the cost of the move by the commercial carrier. A check for 
90 percent of the amount of the estimate, if approved, payable to the 
individual and the carrier, may be delivered to the individual at the 
time of the scheduled move or within 10 days prior thereto.
    (c) Lump sum allowance. The lump sum allowance provided in Sec.
617.45(a)(3) shall be paid when arrangements are completed for 
relocation of the individual and family, if any, but not more than 10 
days before the earlier of the individual's anticipated departure from 
the individual's residence to begin relocation or the anticipated date 
of shipment of the individual's household goods and personal effects.
    (d) Relocation completed. A relocation is completed when an 
individual and family, if any, and their household goods and personal 
effects arrive at the individual's residence in the area of relocation. 
If no household goods and personal effects are moved, a relocation is 
completed when the individual and family, if any, arrive in the area of 
relocation and establish a residence in the new area. The later arrival 
of a family member approved for separate travel shall not alter the date 
a relocation was completed.



                      Subpart F_Job Search Program



Sec.617.49  Job Search Program.

    (a) Program requirements. (1) A worker, after being separated from 
adversely affected employment, must participate in an approved job 
search program (JSP), or have completed a JSP, as a condition for 
receiving TRA, except where the State agency determines that an 
acceptable JSP is not reasonably available.
    (2) A TRA claimant is subject to participation in a JSP as a 
condition for

[[Page 136]]

receiving TRA for weeks of unemployment which begin after the date the 
claimant is notified of the requirement and has filed an initial claim 
for TRA. The claimant is not subject to the JSP as a condition for 
receiving TRA for weeks which begin prior to that date.
    (3) When the State agency determines that the worker has failed to 
begin participation in an approved JSP, or ceased to participate in such 
a JSP before completion, and there is no justifiable cause for such 
failure or cessation, no TRA may be paid to the worker for weeks 
beginning with the week that failure or cessation occurred when it is 
determined that such failure or cessation was without justifiable cause. 
TRA may be paid thereafter to an otherwise eligible worker only for 
weeks beginning with the week the worker begins or resumes participation 
in an approved JSP or complete the JSP. For purposes of this paragraph 
(a)(3), justifiable cause means such reasons as would justify an 
individual's conduct when measured by conduct expected of a reasonable 
individual in like circumstances, including but not limited to reasons 
beyond the individual's control and reasons related to the individual's 
capability to enroll in an approved JSP or complete the JSP.
    (4) A worker in training approved under Sec. Sec.617.22 through 
617.26, or approved by the State agency under State law, is excepted 
from the JSP qualifying requirement while the worker is attending and 
making satisfactory progress in the training. This exception applies 
whether training begins before or after entitlement to basic TRA 
commences, and also applies after training begins for a worker who is 
attending a JSP program. Exceptions to the JSP qualifying requirement 
must be documented in the worker's claim file by the State agency.
    (b) Approved JSPs. A job search program may be approved if:
    (1) The JSP is provided through the Workforce Investment Act, the 
public employment service, or any other Federal or State funded program, 
and complies with paragraphs (w), (x), and (y) of Sec.617.3.
    (2) The JSP is sponsored by a company or firm from which the worker 
has been separated, and complies with paragraphs (w), (x), and (y) of 
Sec.617.3.
    (c) Determination of reasonably available. (1) Reasonably available 
means an existing approved JSP that is located in the worker's normal 
commuting area, as defined in Sec.617.3, and has sufficient capacity 
to accommodate the worker.
    (2) When the State determines that a JSP is not reasonably available 
for a worker, the requirement is not a condition of qualifying for TRA 
for the weeks involved. When a determination is made with respect to a 
worker, the State agency must document its determination, and the weeks 
involved, in the worker's claim file, prior to making TRA payments to 
the worker.
    (3) The State agency may issue a blanket waiver of the JSP 
qualifying requirement for TRA for groups of workers, where deemed 
appropriate, when it is determined that there is no functioning JSP.
    (4) All determinations that a JSP is not reasonably available should 
extend only for that period of time that a JSP is not reasonably 
available, and the exception for workers in approved training should 
extend until the completion of training. If the State determines that a 
JSP is reasonably available at a later date, then the JSP qualifying 
requirement must be met for entitlement to basic TRA for weeks of 
unemployment beginning with the week in which JSP becomes reasonably 
available.
    (d) JSP allowances. Subsistence and transportation costs shall be 
approved for workers participating in JSPs when deemed appropriate and 
within available State funding levels. Costs incurred may not exceed 
those allowable for training under Sec. Sec.617.27 and 617.28, if, and 
when, the State refers a worker to a JSP outside the normal commuting 
area.
    (e) Termination of requirement. The job search program requirement 
set out in this section shall not be a condition of entitlement to TRA 
for any week.

[53 FR 32351, Aug. 24, 1988, as amended at 54 FR 22277, May 23, 1989; 59 
FR 939, Jan. 6, 1994; 71 FR 35516, June 21, 2006]

[[Page 137]]



          Subpart G_Administration by Applicable State Agencies



Sec.617.50  Determinations of entitlement; notices to individuals.

    (a) Determinations of initial applications for TRA or other TAA. The 
State Agency whose State law is the applicable State law under Sec.
617.16 shall upon the filing of an initial application for TRA or other 
TAA promptly determine the individual's entitlement to such TRA or other 
TAA under this part 617, and may accept for such purposes information 
and findings supplied by another State agency under this part 617.
    (b) Determinations of subsequent applications for TRA or other TAA. 
The State agency shall, upon the filing of an application for payment of 
TRA, or subsistence and transportation under Sec. Sec.617.27 and 
617.28, with respect to a week, promptly determine whether the 
individual is eligible for a payment of TRA, or subsistence and 
transportation, with respect to such week, and, if eligible, the amount 
of TRA, or subsistence and transportation, for which the individual is 
eligible. In addition, the State agency promptly shall, upon the filing 
of a subsequent application for job search allowances (where the total 
of previous job search allowances paid the individual was less than 
$600), determine whether the individual is eligible for job search 
allowances, and, if eligible, the amount of job search allowances for 
which the individual is eligible.
    (c) Redeterminations. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to a claim for UI under 
the applicable State law shall apply to determinations pertaining to all 
forms of TAA under this part 617.
    (d) Use of State law. In making determinations or redeterminations 
under this section, or in reviewing such determinations or 
redeterminations under Sec.617.51, a State agency shall apply the 
regulations in this part 617. As to matters committed by this part 617 
to the applicable State law, a State agency, a hearing officer, or a 
State court shall apply the applicable State law and regulations 
thereunder, including procedural requirements of such State law or 
regulations, except so far as such State law or regulations are 
inconsistent with this part 617 or the purpose of this part 617: 
Provided, that, no provision of State law or regulations on good cause 
for waiver of any time limit, or for late filing of any claim, shall 
apply to any time limitation referred to or specified in this part 617, 
unless such State law or regulation is made applicable by a specific 
provision of this part 617.
    (e) Notices to individual. The State agency shall notify the 
individual in writing of any determination or redetermination as to 
entitlement to TAA. Each determination or redetermination shall inform 
the individual of the reason for the determination or redetermination 
and of the right to reconsideration or appeal in the same manner as 
determinations of entitlement to UI are subject to redetermination or 
appeal under the applicable State law.
    (f) Promptness. Full payment of TAA when due shall be made with the 
greatest promptness that is administratively feasible.
    (g) Procedure. Except where otherwise required by the Act or this 
part 617, the procedures for making and furnishing determinations and 
written notices of determinations to individuals, shall be consistent 
with the Secretary's ``Standard for Claim Determinations--Separation 
Information,'' Employment Security Manual, part V, sections 6010-6015 
(appendix B of this part).

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 939, 943, Jan. 6, 1994]



Sec.617.51  Appeals and hearings.

    (a) Applicable State law. A determination or redetermination under 
this part 617 shall be subject to review in the same manner and to the 
same extent as determinations and redeterminations under the applicable 
State law, and only in that manner and to that extent. Proceedings for 
review of a determination or redetermination may be consolidated or 
joined with proceedings for review of a determination or redetermination 
under the State law where convenient or necessary. Procedures as to the 
right of appeal and opportunity for fair hearing shall be consistent 
with sections 303(a) (1) and (3) of the

[[Page 138]]

Social Security Act (42 U.S.C. 503(a) (1) and (3)).
    (b) Appeals promptness. Appeals under paragraph (a) of this section 
shall be decided with a degree of promptness meeting the Secretary's 
``Standard on Appeals Promptness--Unemployment Compensation'' (part 650 
of this chapter). Any provisions of the applicable State law for 
advancement or priority of UI cases on judicial calendars, or otherwise 
intended to provide for prompt payment of UI when due, shall apply to 
proceedings involving entitlement to TAA under this part 617.



Sec.617.52  Uniform interpretation and application.

    (a) First rule of construction. The Act and the implementing 
regulations in this part 617 shall be construed liberally so as to carry 
out the purpose of the Act.
    (b) Second rule of construction. The Act and the implementing 
regulations in this part 617 shall be construed so as to assure insofar 
as possible the uniform interpretation and application of the Act and 
this part 617 throughout the United States.
    (c) Effectuating purpose and rules of construction. (1) To 
effectuate the purpose of the Act and this part 617 and to assure 
uniform interpretation and application of the Act and this part 617 
throughout the United States, a State agency shall forward, not later 
than 10 days after issuance, to the Department a copy of any judicial or 
administrative decision ruling on an individual's entitlement to TAA 
under this part 617. On request of the Department, a State agency shall 
forward to the Department a copy of any determination or redetermination 
ruling on an individual's entitlement to TAA under this part 617.
    (2) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part 617, the Department may at any 
time notify the State agency of the Department's view. Thereafter, the 
State agency shall issue a redetermination or appeal if possible, and 
shall not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part 617, the Department may at any time notify the State 
agency of the Department's view. If the determination, redetermination, 
or decision in question denies TAA to an individual, the steps outlined 
in paragraph (c)(2) of this section shall be followed by the State 
agency. If the determination, redetermination, or decision in question 
awards TAA to an individual, the benefits are ``due'' within the meaning 
of section 303(a)(1) of the Social Security Act (42 U.S.C. 503(a)(1)), 
and therefore must be paid promptly to the individual. However, the 
State agency, shall take the steps outlined in paragraph (c)(2) of this 
section, and payments to the individual may be temporarily delayed if 
redetermination or appeal action is taken not more than one business day 
following the day on which the first payment otherwise would be issued 
to the individual; and the redetermination action is taken or appeal is 
filed to obtain a reversal of the award of TAA and a ruling consistent 
with the Department's view; and the redetermination action or appeal 
seeks an expedited redetermination or appeal within not more than two 
weeks after the redetermination action is taken or the appeal is filed. 
If redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding TAA or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the individual.

[[Page 139]]

    (4) (i) If any determination, redetermination, or decision, referred 
to in paragraph (c)(2) or paragraph (c)(3) of this section, is treated 
as a precedent for any future application for TAA, the Secretary will 
decide whether the Agreement with the State entered into under the Act 
and this part 617 shall be terminated and Sec.617.59(f) applied.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part 617, including 
any determination, redetermination, or decision referred to in paragraph 
(c)(2) or paragraph (c)(3) of this section, the Secretary will decide 
whether the State shall be required to restore the funds of the United 
States for any sums paid under such a determination, redetermination, or 
decision, and whether, in the absence of such restoration, the Agreement 
with the State shall be terminated and Sec.617.59(f) applied and 
whether other action shall be taken to recover such sums for the United 
States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (c)(2) or paragraph (c)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired. 
Such request shall be made to the Secretary and may include views and 
arguments on the matters to be decided by the Secretary under paragraph 
(c)(4) of this section.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.

(Approved by the Office of Management and Budget under control number 
1205-0222)



Sec.617.53  Subpoenas.

    A State agency may issue subpoenas for attendance of witnesses and 
production of records on the same terms and conditions as under the 
State law. Compliance may be enforced on the same terms and conditions 
as under the State law, or, if a State court declines to enforce a 
subpoena issued under this section, the State agency may petition for an 
order requiring compliance with such subpoena to the United States 
District Court within the jurisdiction of which the relevant proceeding 
under this part 617 is conducted.



Sec.617.54  State agency rulemaking.

    A State agency may establish supplemental procedures not 
inconsistent with the Act or this part 617 or procedures prescribed by 
the Department to further effective administration of this part 617. The 
exact text of such supplemental procedure or procedures, certified as 
accurate by a responsible official, employee, or counsel of the State 
agency, shall be submitted to the Department, on a form supplied by the 
Department. No supplemental procedure shall be effective unless and 
until approved by the Department. Approval may be granted on a temporary 
basis, not to exceed 90 days, in cases of administrative necessity. On 
reasonable notice to a State agency, approval of a supplemental 
procedure may be withdrawn at any time. If public notice and opportunity 
for hearing would be required under a State law for adoption of a 
similar or analogous procedure involving UI, such public notice and 
opportunity for hearing shall be afforded by the State agency as to the 
supplemental procedure.

(Approved by the Office of Management and Budget under control number 
1205-0222)



Sec.617.55  Overpayments; penalties for fraud.

    (a) Determination and repayment. (1) If a State agency or a court of 
competent jurisdiction determines that any person or individual has 
received any payment under this part 617 to which the person or 
individual was not entitled, including a payment referred to in 
paragraph (b) or paragraph (c) of this section, such person or 
individual shall be liable to repay such amount to the State agency, and 
the State agency shall recover any such overpayment in accordance with 
the provisions of this part 617; except that the State agency may waive 
the recovery of any such overpayment if the State agency determines, in 
accordance with the guidelines prescribed in paragraph (a)(2) of this 
section, that:
    (i) The payment was made without fault on the part of such person or 
individual; and

[[Page 140]]

    (ii) Requiring such repayment would be contrary to equity and good 
conscience.
    (2)(i)(A) In determining whether fault exists for purposes of 
paragraph (a)(1)(i) of this section, the following factors shall be 
considered:
    (1) Whether a material statement or representation was made by the 
person or individual in connection with the application for TAA that 
resulted in the overpayment, and whether the person or individual knew 
or should have known that the statement or representation was 
inaccurate.
    (2) Whether the person or individual failed or caused another to 
fail to disclose a material fact, in connection with an application for 
TAA that resulted in the overpayment, and whether the person or 
individual knew or should have known that the fact was material.
    (3) Whether the person or individual knew or could have been 
expected to know, that the person or individual was not entitled to the 
TAA payment.
    (4) Whether, for any other reason, the overpayment resulted directly 
or indirectly, and partially or totally, from any act or omission of the 
person or individual or of which the person or individual had knowledge, 
and which was erroneous or inaccurate or otherwise wrong.
    (5) Whether there has been a determination of fraud under paragraph 
(b) of this section or section 243 of the Act.
    (B) An affirmative finding on any one of the factors in paragraphs 
(a)(2)(i)(A) of this section precludes waiver of overpayment recovery.
    (ii)(A) In determining whether equity and good conscience exists for 
purposes of paragraph (a)(1)(ii) of this section, the following factors 
shall be considered:
    (1) Whether the overpayment was the result of a decision on appeal, 
whether the State agency had given notice to the person or individual 
that the case has been appealed and that the person or individual may be 
required to repay the overpayment in the event of a reversal on appeal, 
and whether recovery of the overpayment will not cause extraordinary and 
lasting financial hardship to the person or individual.
    (2) Whether recovery of the overpayment will not cause extraordinary 
financial hardship to the person or individual, and there has been no 
affirmative finding under paragraph (a)(2)(ii)(A) of this section with 
respect to such person or individual and such overpayment.
    (B) An affirmative finding on either of the foregoing factors in 
paragraphs (a)(2)(ii)(A) of this section precludes waiver of overpayment 
recovery.
    (C)(1) For the purpose of paragraph (a)(2)(ii) of this section, an 
extraordinary financial hardship shall exist if recovery of the 
overpayment would result directly in the person's or individual's loss 
of or inability to obtain minimal necessities of food, medicine, and 
shelter for a substantial period of time; and an extraordinary and 
lasting financial hardship shall be extraordinary as described above and 
may be expected to endure for the foreseeable future.
    (2) In applying this test in the case of attempted recovery by 
repayment, a substantial period of time shall be 30 days, and the 
foreseeable future shall be at least three months. In applying this test 
in the case of proposed recoupment from other benefits, a substantial 
period of time and the foreseeable future shall be the longest potential 
period of benefit entitlement as seen at the time of the request for a 
waiver determination. In making these determinations, the State agency 
shall take into account all potential income of the person or individual 
and the person's or individual's firm, organization, or family and all 
cash resources available or potentially available to the person or 
individual and the person's or individual's firm, organization, or 
family in the time period being considered.
    (3) Determinations granting or denying waivers of overpayments shall 
be made only on request for a waiver determination. Such request shall 
be made on a form which shall be furnished to the person or individual 
by the State agency. Notices of determination of overpayments shall 
include an accurate description of the waiver provisions of paragraph 
(a) of this section, if the State agency has elected to allow waivers of 
TAA overpayments.

[[Page 141]]

    (4) Each State shall have the option to establish a policy as to 
whether the waiver provisions of this section shall be applied to TAA 
overpayments. A State's decision on its policy shall not be controlled 
by whether it waives UI overpayments, but the State's decision shall be 
published for the information of the public and the Department.
    (5)(i) Unless an overpayment is otherwise recovered, or is waived 
under paragraph (a) of this section, the State agency shall recover the 
overpayment by deduction from any sums payable to such person or 
individual under:
    (A) This part 617;
    (B) Any Federal unemployment compensation law administered by the 
State agency; or
    (C) Any other Federal law administered by the State agency which 
provides for the payment of unemployment assistance or an allowance with 
respect to unemployment.
    (ii) In addition, a State agency may recover the overpayment from 
unemployment insurance payable to such person or individual under the 
State law.
    (b) Fraud. If a State agency or a court of competent jurisdiction 
finds that any person or individual:
    (1) Knowingly has made, or caused another to make, a false statement 
or representation of a material fact; or
    (2) Knowingly has failed, or caused another to fail, to disclose a 
material fact; and as a result of such false statement or 
representation, or of such nondisclosure, such individual has received 
any payment under this part 617 to which the person or individual was 
not entitled, such person or individual shall, in addition to any other 
penalty provided by law, be ineligible for any further payments under 
this part 617.
    (c) Training, job search and relocation allowances. (1) If an 
individual fails, with good cause, to complete training, a job search, 
or a relocation, any payment or portion of a payment made under this 
part 617 to such individual or any person that is not properly and 
necessarily expended in attempting to complete such training, job 
search, or relocation, shall constitute an overpayment.
    (2) If an individual fails, without good cause, to complete 
training, a job search, or a relocation, any payment made under this 
part 617 to such individual or any person shall constitute an 
overpayment.
    (3) Such overpayment shall be recovered or waived as provided in 
paragraph (a) of this section.
    (d) Final determination. Except for overpayments determined by a 
court of competent jurisdiction, no repayment may be required, and no 
deduction may be made, under this section until a determination under 
paragraph (a) of this section by the State agency has been made, notice 
of the determination and an opportunity for a fair hearing thereon has 
been given to the person or individual concerned, and the determination 
has become final.
    (e) Deposit. Any amount recovered by a State agency under this 
section shall be deposited into the Federal fund or account from which 
payment was made.
    (f) Procedural requirements. (1) The provisions of paragraphs (c), 
(e), and (g) of Sec.617.50 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec.617.51 shall apply to determinations and 
redeterminations made pursuant to this section.
    (g) Fraud detection and prevention. State procedures for the 
detection and prevention of fraudulent overpayments of TAA shall be, as 
a minimum, commensurate with the procedures adopted by the State with 
respect to State unemployment compensation and consistent with the 
Secretary's ``Standard for Fraud and Overpayment Detection,'' Employment 
Security Manual, Part V, sections 7510-7515 (Appendix C of this part).
    (h) Debts due the United States or Others. (1) Notwithstanding any 
provision of this part 617, TAA payable to a person or an individual 
under this part 617 shall be applied by the State agency for the 
recovery by offset of any debt due the United States from the person or 
individual.
    (2) TAA shall not be applied or used by the State agency in any 
manner for the payment of any debt of any person or individual to any 
State or any other entity or person, except that TRA payable to an 
individual shall be payable

[[Page 142]]

to someone other than the individual if required by State law and 
Federal law to satisfy the individual's obligation for child support or 
alimony.
    (i) Definition of person. For purposes of this section, a person 
includes any employer or other entity or organization as well as the 
officers and officials thereof who may bear individual responsibility.

[59 FR 939, Jan. 6, 1994, as amended at 59 FR 943, Jan. 6, 1994]



Sec.617.56  Inviolate rights to TAA.

    Except as specifically provided in this part 617, the rights of 
individuals to TAA shall be protected in the same manner and to the same 
extent as the rights of persons to UI are protected under the applicable 
State law. Such measures shall include protection of applicants for TAA 
from waiver, release, assignment, pledge, encumbrance, levy, execution, 
attachment, and garnishment of their rights to TAA, except as provided 
in Sec.617.55. In the same manner and to the same extent, individuals 
shall be protected from discrimination and obstruction in regard to 
seeking, applying for, and receiving any right to TAA.



Sec.617.57  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Act as the Secretary requires 
and will make all such records available for inspection, examination and 
audit by such Federal officials as the Secretary may designate or as may 
be required by law. Such recordkeeping will be adequate to support the 
reporting of TAA activity on reporting form ETA 563 approved under OMB 
control number 1205-0016.
    (b) Disclosure of information. Information in records maintained by 
a State agency in administering the Act shall be kept confidential, and 
information in such records may be disclosed only in the same manner and 
to the same extent as information with respect to UI and the entitlement 
of individuals thereto may be disclosed under the applicable State law. 
Such information shall not, however, be disclosed to an employer or any 
other person except to the extent necessary to obtain information from 
the employer or other person for the purposes of this part 617. This 
provision on the confidentiality of information maintained in the 
administration of the Act shall not apply, however, to the Department or 
for the purposes of Sec.617.55 or paragraph (a) of this section, or in 
the case of information, reports and studies required pursuant to Sec.
617.61, or where the result would be inconsistent with the Freedom of 
Information Act (5 U.S.C. 552), the Privacy Act of 1974 (5 U.S.C. 552a), 
or regulations of the Department promulgated thereunder (see 29 CFR 
parts 70 and 70a).



Sec.617.58  Unemployment insurance.

    Unemployment insurance payable to an adversely affected worker shall 
not be denied or reduced for any week by reason of any right to a 
payment of TAA under the Act and this part 617.



Sec.617.59  Agreements with State agencies.

    (a) Authority. Before performing any function or exercising any 
jurisdiction under the Act and this part 617, a State or State agency 
(as defined in Sec.617.3(ii)) shall execute an Agreement with the 
Secretary meeting the requirements of the Act.
    (b) Execution. An Agreement under paragraph (a) of this section 
shall be signed on behalf of a State or State agency by an authorized 
official of the State or such State agency, and the signature shall be 
dated. The authority of the State or State agency official shall be 
certified by the Attorney General of the State or counsel for the State 
agency, unless the Agreement is signed by the Governor of the State. An 
agreement will be executed on behalf of the United States by the 
Secretary.
    (c) Public access to Agreements. The State agency will make 
available to any individual or organization an accurate copy of the 
Agreement with the Agency for inspection and copying. Copies of an 
Agreement may be furnished on request to any individual or organization 
upon payment of the same charges, if any, as apply to the furnishing of 
copies of other records of the State agency.

[[Page 143]]

    (d) Amended Agreement. A State or State agency shall execute an 
amended Agreement with the Secretary prior to administering any 
amendments to the TAA provisions of the Trade Act of 1974.
    (e) Agent of United States. In making determinations, 
redeterminations, and in connection with proceedings for review thereof, 
a State or State agency which has executed an Agreement as provided in 
this section shall be an agent of the United States and shall carry out 
fully the purposes of the Act and this part 617.
    (f) Breach. If the Secretary finds that a State or State agency has 
not fulfilled its commitments under its Agreement under this section, 
section 3302(c)(3) of the Internal Revenue Code of 1986 shall apply. A 
State or State agency shall receive reasonable notice and opportunity 
for hearing before a finding is made under section 3302(c)(3) whether 
there has been a failure to fulfill the commitments under the Agreement.
    (g) Secretary's review of State agency compliance. The appropriate 
Regional Administrator shall be initially responsible for the periodic 
monitoring and reviewing of State and State agency compliance with the 
Agreement entered into under this section.
    (h) Program coordination. State agencies providing employment 
services, training and supplemental assistance under Subpart C of this 
part shall, in accordance with their Agreements under this section, 
coordinate such services and payments with programs and services 
provided by the Workforce Investment Act and with the State agency 
administering the State law.
    (i) Administration absent State Agreement. In any State in which no 
Agreement under this section is in force, the Secretary shall administer 
the Act and this part 617 and pay TAA hereunder through appropriate 
arrangements made by the Department, and for this purpose the Secretary 
or the Department shall be substituted for the State or cooperating 
State agency wherever appropriate in this part 617. Such arrangements 
shall include the requirement that TAA be administered in accordance 
with this part 617, and the provisions of the applicable State law 
except to the extent that such State law is inconsistent with any 
provision of this part 617 or section 303 of the Social Security Act (42 
U.S.C. 503) or section 3304(a) of the Internal Revenue Code of 1986 (26 
U.S.C. 3304(a)), and shall also include provision for a fair hearing for 
any individual whose application for TAA is denied. A final 
determination under paragraph (i) of this section as to entitlement to 
TAA shall be subject to review by the courts in the same manner and to 
the same extent as is provided by section 205(g) of the Social Security 
Act (42 U.S.C. 405(g)).

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32351, Aug. 24, 1988; 
59 FR 941, Jan. 6, 1994; 71 FR 35516, June 21, 2006]



Sec.617.60  Administration requirements. [Reserved]



Sec.617.61  Information, reports, and studies.

    A State agency shall furnish to the Secretary such information and 
reports and conduct such studies as the Secretary determines are 
necessary or appropriate for carrying out the purposes of the Act and 
this part 617.



Sec.617.64  Termination of TAA program benefits.

    The following rules are applicable to the termination of TAA 
benefits under the Act:
    (a) No application for TRA, or transportation or subsistence payment 
while in training approved under subpart C of this part 617, shall be 
approved, and no payment of TRA or payment for transportation or 
subsistence occurring on or before the termination date shall be made 
after the termination date specified in the Act, unless the claim for 
TRA or an invoice for transportation and subsistence is presented to the 
State agency and a final determination is made on the amount payable on 
or before the termination date in the Act.
    (b) No payment of job search or relocation allowances shall be made 
after the termination date specified in the Act, unless an application 
for such allowances was approved, such job search or relocation was 
completed, and a final determination made on the amount payable for such 
benefits by

[[Page 144]]

the State agency on or before the termination date in the Act.
    (c) No training under subpart C of this part shall be approved 
unless a determination regarding the approval of such training was made 
on or before the termination date in the Act, and such training 
commenced on or before such termination date. Consistent with the 
requirements of section 236(a)(1) of the Act, and the termination 
provisions of paragraph (c) of this section, a final determination must 
be made on the invoice for the training costs by the State agency on or 
before the termination date specified in the Act to cover tuition 
related expenses. Determinations on tuition bills shall be limited to 
the training term, quarter, semester or other period beginning on or 
before the termination date in the Act. The training period should be in 
accord with normal billing practices of the training provider and/or 
State agency approval practices.

[59 FR 941, Jan. 6, 1994]



    Sec. Appendix A to Part 617--Standard for Claim Filing, Claimant 
             Reporting, Job Finding, and Employment Services

         Employment Security Manual (Part V, Sections 5000-5004)

                         5000-5099 Claims Filing

  5000 Standard for Claim Filing, Claimant Reporting, Job Finding, and 
                           Employment Services

    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for:
    ``Payment of unemployment compensation solely through public 
employment offices or such other agencies as the Secretary may 
approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax and section 
303(a)(5) of the Social Security Act require that a State law provide 
for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    B. Secretary's interpretation of federal law requirements.
    1. The Secretary interprets section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act to 
require that a State law provide for payment of unemployment 
compensation solely through public employment offices or claims offices 
administered by the State employment security agency if such agency 
provides for such coordination in the operations of its public 
employment offices and claims offices as will insure (a) the payment of 
benefits only to individuals who are unemployed and who are able to work 
and available for work, and (b) that individuals claiming unemployment 
compensation (claimants) are afforded such placement and other 
employment services as are necessary and appropriate to return them to 
suitable work as soon as possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for:
    a. Such contact by claimants with public employment offices or 
claims offices or both, (1) as will reasonably insure the payment of 
unemployment compensation only to individuals who are unemployed and who 
are able to work and available for work, and (2) that claimants are 
afforded such placement and other employment services as are necessary 
and appropriate to facilitate their return to suitable work as soon as 
possible; and
    b. Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such States law.

   5001 Claim Filing and Claimant Reporting Requirements Designed To 
                   Satisfy Secretary's Interpretation

    A. Claim filing--total or part-total unemployment
    1. Individuals claiming unemployment compensation for total or part-
total unemployment are required to file a claim weekly or biweekly, in 
person or by mail, at a public employment office or a claims office 
(these terms include offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person.
    a. His new claim with respect to a benefit year, or his continued 
claim for a waiting week or for his first compensable week of 
unemployment in such year; and
    b. Any other claim, when requested to do so by the claims personnel 
at the office at which he files his claim(s) because questions about his 
right to benefits are raised by circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;

[[Page 145]]

    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirements; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances:
    a. He is located in an area requiring the expenditure of an 
unreasonable amount of time or money in traveling to the nearest 
facility established by the State agency for filing claims in person;
    b. Conditions make it impracticable for the agency to take claims in 
person;
    c. He has returned to full-time work on or before the scheduled date 
for his filing a claim, unless the agency makes provision for in-person 
filing at a time and place that does not interfere with his employment;
    d. The agency finds that he has good cause for failing to file a 
claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

   5002 Requirement for Job Finding, Placement, and Other Employment 
         Services Designed To Satisfy Secretary's Interpretation

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency:
    1. The claims personnel are required to give each claimant such 
necessary and appropriate assistance as they reasonably can in finding 
suitable work and at their discretion determine when more complete 
placement and employment services are necessary and appropriate for a 
claimant; and if they determine more complete services are necessary and 
appropriate, the claims personnel are to refer him to employment service 
personnel in the public employment office in which he has been filing 
claim(s), or, if he has been filing in a claims office, in the public 
employment office most accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.
    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.

[[Page 146]]

    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel required to so 
arrange and coordinate the contacts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) his failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

             5004 Evaluation of Alternative State Provisions

    If the State law provisions do not conform to the ``suggested State 
law requirements'' set forth in sections 5001 and 5002, but the State 
law contains alternative provisions, the Manpower Administrator, in 
collaboration with the State agency, will study the actual or 
anticipated affect of the alternative provisions. If the Manpower 
Administrator concludes that the alternative provisions satisfy the 
requirements of the Federal law as construed by the Secretary (see 
section 5000 B) he will so notify the State agency. If he does not so 
conclude, he will submit the matter to the Secretary. If the Secretary 
concludes that the alternative provisions satisfy such requirements, the 
State agency will be so notified. If the Secretary concludes that there 
is a question as to whether the alternative provisions satisfy such 
requirements, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.3.

[59 FR 943, Jan. 6, 1994]



    Sec. Appendix B to Part 617--Standard for Claim Determinations--
                         Separation Information

    6010 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. . . .
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012 Criteria for Review of State Law Conformity with Federal 
Requirements:
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to

[[Page 147]]

know, establish, and protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013 Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria:
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices:
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraph 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
there is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is

[[Page 148]]

disqualified under the labor dispute provision; and (b) reducing 
claimant's weekly benefit amount because of income other than earnings 
or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wage is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits:
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    When claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in

[[Page 149]]

order to effectuate a protest, redetermination, or appeal, he must be so 
advised and advised also that he must request a written notice of 
determination before he takes any such action.
    (2) Other deductions:
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2) (a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determinations.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ---- (name of 
pamphlet or booklet) heretofore furnished to you.''

[[Page 150]]

    6014 Separation Information Requirements Designed To Meet Department 
of Labor Criteria:
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker:
    1. Information required to be given. Employers are required to give 
their employees information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015 Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of the 
alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in section 6012, he 
will so notify the State agency. If the Administrator of the Bureau does 
not so conclude, he will submit the matter to the Secretary. If the 
Secretary concludes that the alternative provisions satisfy the criteria 
in section 6012, the State agency will be so notified. If the Secretary 
concludes that there is a question as to whether the alternative 
provisions satisfy the criteria, the State agency will be advised that 
unless the State law provisions are appropriately revised, a notice of 
hearing will be issued as required by the Code of Federal Regulations, 
title 20, Sec.601.5.

[51 FR 45848, Dec. 22, 1986. Redesignated at 59 FR 943, Jan. 6, 1994]



    Sec. Appendix C to Part 617--Standard for Fraud and Overpayment 
                                Detection

    7510 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''

[[Page 151]]

    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation . . .''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    7511 The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the claimant or 
others, and (2) to deter claimants from obtaining benefits through 
willful misrepresentation.
    7513 Criteria for Review of State Conformity With Federal 
Requirements. In determining State conformity with the above 
requirements of the Internal Revenue Code and the Social Security Act, 
as interpreted by the Secretary of Labor, the following criteria will be 
applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explanation: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agent for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are comonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan 
of investigation based on a sample post-audit will be considered as 
partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated?
    Explanation. To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants?
    Explanation. To meet this criterion, the State agency must issue 
adequate material of claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful

[[Page 152]]

misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.
    *7515 Evaluation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative methods of administration. If the Bureau concludes that 
the alternative methods satisfy the criteria in section 7513, it will so 
notify the State agency. If the Bureau does not so conclude, it will 
submit to the Secretary the results of the study for his determination 
of whether the State's alternative methods of administration meet the 
criteria.

[51 FR 45848, Dec. 22, 1986. Redesignated at 59 FR 943, Jan. 6, 1994]



PART 618_TRADE ADJUSTMENT ASSISTANCE UNDER THE TRADE ACT OF 1974,
AS AMENDED--Table of Contents



Subpart A-G [Reserved]

          Subpart H_Administration by Applicable State Agencies

Sec.
618.890 Merit staffing.

            Subpart I_Allocation of Training Funds to States

618.900 Annual training cap.
618.910 Distribution of initial allocation of training funds.
618.920 Reserve fund distributions.
618.930 Second distribution.
618.940 Insufficient funds.

    Source: 75 FR 17000, Apr. 2, 2010, unless otherwise noted.

Subpart A-G [Reserved]



          Subpart H_Administration by Applicable State Agencies

    Authority: 19 U.S.C. 2320; Secretary's Order No. 03-2009, 74 FR 
2279, Jan. 14, 2009.



Sec.618.890  Merit staffing.

    (a) Merit-based State personnel. The State must, subject to the 
transition period in paragraph (b) of this section, engage only State 
government personnel to perform Trade Adjustment Assistance (TAA)-funded 
functions undertaken to carry out the worker adjustment assistance 
provisions of the Trade Act of 1974, as amended, and must apply to such 
personnel the standards for a merit system of personnel administration 
applicable to personnel covered under 5 CFR part 900, subpart F.
    (b) Transition period. A State not already in compliance with the 
merit system requirement of paragraph (a) of this section must comply by 
December 15, 2010.
    (c) Exemptions for States with employment service operation 
exemptions. A State whose employment service received an exemption from 
merit staffing requirements from the Secretary of Labor (Secretary) 
under the Wagner-Peyser Act will retain an exemption from the 
requirements of paragraph (a) of this section. The exemption does not 
apply to the State's administration of trade readjustment allowances 
which remain subject to the requirements of paragraph (a) of this 
section. To the extent that a State with an authorized ES exemption 
provides TAA-funded services using staff not funded under the Wagner-
Peyser Act, the exemption in this paragraph does not apply, and they 
remain subject to the requirements of paragraph (a) of this section.
    (d) Exceptions for non-inherently governmental functions. The 
requirements of paragraph (a) of this section do not prohibit a State 
from outsourcing functions that are not inherently governmental, as 
defined in Office of Management and Budget (OMB) Circular No. A-76 
(Revised), in any supplemental OMB guidance or superseding authority, 
and in DOL guidance.

[[Page 153]]



            Subpart I_Allocation of Training Funds to States

    Authority: 19 U.S.C. 2320; 19 U.S.C. 2296(g); Secretary's Order No. 
03-2009, 74 FR 2279, Jan. 14, 2009.



Sec.618.900  Annual training cap.

    The total amount of payments that may be made for the costs of 
training will not exceed the cap established under section 236(a)(2)(A) 
of the Trade Act.
    (a) For each of the fiscal years 2009 and 2010, this cap is 
$575,000,000; and
    (b) For the period beginning October 1, 2010, and ending December 
31, 2010, this cap is $143,750,000.



Sec.618.910  Distribution of initial allocation of training funds.

    (a) Initial allocation. The initial allocation for a fiscal year 
will total 65 percent of the training funds available for that fiscal 
year. The Department of Labor (Department) will announce the amount of 
each State's initial allocation of funds in accordance with the 
requirements of this section at the beginning of each fiscal year. The 
Department will determine this initial allocation on the basis of the 
full amount of the training cap for that year, even if the full amount 
has not been appropriated to the Department at that time.
    (b) Timing of the distribution of the initial allocation. The 
Department will, as soon as practical after the beginning of each fiscal 
year, distribute the initial allocation announced under paragraph (a) of 
this section. However, the Department will not distribute the full 
amount of the initial allocation until it receives the entire fiscal 
year's appropriation of training funds. If the full year's appropriated 
amount of training funds is less than the training cap, then the 
Department will distribute 65 percent of the amount appropriated.
    (c) Hold harmless provision. Except as provided in paragraph (d) of 
this section, in no case will the amount of the initial allocation to a 
State in a fiscal year be less than 25 percent of the initial allocation 
to that State in the preceding fiscal year.
    (d) Minimum initial allocation. If a State has an adjusted initial 
allocation of less than $100,000, as calculated in accordance with 
paragraph (e)(2) of this section, that State will not receive any 
initial allocation, and the funds that otherwise would have been 
allocated to that State instead will be allocated among the other States 
in accordance with this section. A State that does not receive an 
initial distribution may apply under Sec.618.920(b) for reserve funds 
to obtain the training funding that it requires.
    (e) Process of determining initial allocation. (1) The Department 
will first apply the factors described in paragraph (f) of this section 
to determine an unadjusted initial allocation for each State.
    (2) The Department will then apply the hold harmless provision of 
paragraph (c) of this section to the unadjusted initial allocation, as 
follows:
    (i) A State whose unadjusted initial allocation is less than its 
hold harmless amount but is $100,000 or more, will have its initial 
allocation adjusted up to its hold harmless amount. If a State's 
unadjusted allocation is less than $100,000, the State will receive no 
initial allocation, in accordance with paragraph (d) of this section. 
Those funds will be shared among other States as provided in paragraph 
(e)(3) of this section.
    (ii) A State whose unadjusted initial allocation is no less than its 
hold harmless threshold will receive its hold harmless amount and will 
also receive an adjustment equal to the State's share of the remaining 
initial allocation funds, as provided in paragraph (e)(3) of this 
section.
    (3) The initial allocation funds remaining after the adjusted 
initial allocations are made to those States receiving only their hold 
harmless amounts, as described in paragraph (e)(2)(i) of this section, 
will be distributed among the States with unadjusted initial allocations 
that were no less than their hold harmless amounts, as described in 
paragraph (e)(2)(ii) of this section (the remaining States). The 
distribution of the remaining initial allocation funds among the 
remaining States will be made by reapplying the calculation in paragraph 
(f) of this section. This recalculation will disregard

[[Page 154]]

States receiving only their hold harmless amount under paragraph 
(e)(2)(i) of this section, so that the combined percentages of the 
remaining States total 100 percent.
    (f) Initial allocation factors. (1) In determining how to make the 
initial allocation of training funds, the Department will apply, as 
provided in paragraph (f)(3) of this section, the following factors with 
respect to each State:
    (i) The trend in the number of workers covered by certifications of 
eligibility during the most recent four consecutive calendar quarters 
for which data are available. The trend will be established by assigning 
a greater weight to the most recent quarters, giving those quarters a 
larger share of the factor;
    (ii) The trend in the number of workers participating in training 
during the most recent four consecutive calendar quarters for which data 
are available. The trend will be established by assigning a greater 
weight to the most recent quarters, giving those quarters a larger share 
of the factor;
    (iii) The number of workers estimated to be participating in 
training during the fiscal year. The estimate will be calculated by 
dividing the weighted average number of training participants for the 
State determined in paragraph (f)(1)(ii) of this section by the sum of 
the weighted averages for all States and multiplying the resulting ratio 
by the projected national average of training participants for the 
fiscal year, using the estimates underlying the Department's most recent 
budget submission or update; and
    (iv) The amount of funding estimated to be necessary to provide 
approved training to such workers during the fiscal year. The estimate 
will be calculated by multiplying the estimated number of participants 
in paragraph (f)(1)(iii) of this section by the average training cost 
for the State. The average training cost will be calculated by dividing 
total training expenditures for the most recent four quarters by the 
average number of training participants for the same time period.
    (2) The Department may use such other factors that it considers 
appropriate.
    (3) The Department will assign each of the factors listed in 
paragraphs (f)(1)(i) through (f)(1)(iv) of this section an equal weight. 
For each of these weighted factors, the Department will determine the 
national total and each State's percentage of the national total. Based 
on a State's percentage of each of these weighted factors, the 
Department will determine the percentage that the State will receive of 
the amount available for initial allocations. The percentages of initial 
allocation amounts calculated for all States combined will total 100 
percent of initial allocation funds.
    (4) The Department may, by administrative guidance published for 
comment, change the weights provided in paragraphs (f)(1) and (f)(3) of 
this section, or add additional factors. No such changes or additions 
will take effect before December 31, 2010.



Sec.618.920  Reserve fund distributions.

    (a) The remaining 35 percent of the training funds for a fiscal year 
will be held by the Department as a reserve. Reserve funds will be used, 
as needed, for additional distributions during the remainder of the 
fiscal year and for those States that do not receive an initial 
distribution. States may not receive reserve funds for TAA 
administration or employment and case management services without a 
request for training funds.
    (b) A State requesting reserve funds must demonstrate that at least 
50 percent of its training funds have been expended, or that it needs 
more funds to meet unusual and unexpected events. A State requesting 
reserve funds also must provide a documented estimate of expected 
funding needs through the end of the fiscal year. That estimate must be 
based on an analysis that includes at least the following:
    (1) The average cost of training in the State;
    (2) The expected number of participants in training through the end 
of the fiscal year; and
    (3) The remaining funds the State has available for training.



Sec.618.930  Second distribution.

    The Department will distribute at least 90 percent of the total 
training

[[Page 155]]

funds for a fiscal year to the States no later than July 15 of that 
fiscal year. The Department will first fund all acceptable requests for 
reserve funds filed before June 1. If there are any funds remaining to 
be distributed after these reserve fund requests are satisfied, those 
funds will be distributed to those States that received an initial 
allocation in an amount greater than their hold harmless amount, using 
the methodology described in Sec.618.910.



Sec.618.940  Insufficient funds.

    If, during a fiscal year, the Department estimates that the amount 
of funds necessary to pay the costs of approved training will exceed the 
training cap under Sec.618.900, the Department will decide how the 
amount of available training funds that have not been distributed at the 
time of the estimate will be allocated among the States for the 
remainder of the fiscal year. That decision will be communicated through 
administrative notice.

                        PARTS 619	621 [RESERVED]



PART 625_DISASTER UNEMPLOYMENT ASSISTANCE--Table of Contents



Sec.
625.1 Purpose; rules of construction.
625.2 Definitions.
625.3 Reemployment assistance.
625.4 Eligibility requirements for Disaster Unemployment Assistance.
625.5 Unemployment caused by a major disaster.
625.6 Weekly amount; jurisdictions; reductions.
625.7 Disaster Unemployment Assistance: Duration.
625.8 Applications for Disaster Unemployment Assistance.
625.9 Determinations of entitlement; notices to individual.
625.10 Appeal and review.
625.11 Provisions of State law applicable.
625.12 The applicable State for an individual.
625.13 Restrictions on entitlement; disqualification.
625.14 Overpayments; disqualification for fraud.
625.15 Inviolate rights to DUA.
625.16 Recordkeeping; disclosure of information.
625.17 Announcement of the beginning of a Disaster Assistance Period.
625.18 Public access to Agreements.
625.19 Information, reports and studies.
625.20 [Reserved]
625.30 Appeal Procedures for Guam, American Samoa, Commonwealth of the 
          Northern Mariana Islands, Federated States of Micronesia, 
          Republic of the Marshall Islands, and the Trust Territory of 
          the Pacific Islands.

Appendix A to Part 625--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 625--Standard for Claim Determinations--Separation 
          Information
Appendix C to Part 625--Standard for Fraud and Overpayment Detection

    Authority: 42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5189a(c); 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).

    Source: 42 FR 46712, Sept. 16, 1977, unless otherwise noted.



Sec.625.1  Purpose; rules of construction.

    (a) Purpose. Section 410 of ``The Robert T. Stafford Disaster Relief 
and Emergency Assistance Act'' amended the program for the payment of 
unemployment assistance to unemployed individuals whose unemployment is 
caused by a major disaster, and to provide reemployment assistance 
services to those individuals. The unemployment assistance provided for 
in section 410 of the Act is hereinafter referred to as Disaster 
Unemployment Assistance, or DUA. The regulations in this part are issued 
to implement sections 410 and 423 of the Act.
    (b) First rule of construction. Sections 410 and 423 of the Act and 
the implementing regulations in this part shall be construed liberally 
so as to carry out the purposes of the Act.
    (c) Second rule of construction. Sections 410 and 423 of the Act and 
the implementing regulations in this part shall be construed so as to 
assure insofar as possible the uniform interpretation and application of 
the Act throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor, on

[[Page 156]]

receipt of a request from the Department, a copy of any determination or 
redetermination ruling on an individual's entitlement to DUA.
    (2) If the Department believes a determination or redetermination is 
inconsistent with the Secretary's interpretation of the Act, the 
Department may at any time notify the State agency of the department's 
view. Thereafter, the State agency shall appeal if possible, and shall 
not follow such determination or redetermination as a precedent; and in 
any subsequent proceedings which involve such determination or 
redetermination, or wherein such determination or redetermination is 
cited as precedent or otherwise relied upon, the State agency shall 
inform the hearing officer of the Department's view and shall make all 
reasonable efforts to obtain modification, limitation, or overruling of 
the determination or redetermination.
    (3) A State agency may request reconsideration of a notice that a 
determination or redetermination is inconsistent with the Act, and shall 
be given an opportunity to present views and arguments if desired. If a 
determination or redetermination setting a precedent becomes final, 
which the Department believes to be inconsistent with the Act, the 
Secretary will decide whether the Agreement with the State shall be 
terminated.
    (4) Concurrence of the Department in a determination or 
redetermination shall not be presumed from the absence of a notice 
issued pursuant to this paragraph.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 554, Jan. 5, 1990]



Sec.625.2  Definitions.

    For the purposes of the Act and this part:
    (a) Act means sections 410 and 423 of The Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (formerly section 407 of 
the ``Disaster Relief Act of 1974'', Pub. L. 93-288, 88 Stat. 143, 156, 
approved May 22, 1974), 42 U.S.C. 5177, 5189a, as amended by The 
Disaster Relief and Emergency Assistance Amendments of 1988, Pub. L. 
100-707, 102 Stat. 4689, 4704, 4705, approved November 23, 1988.
    (b) Agreement means the Agreement entered into pursuant to the Act, 
between a State and the Secretary of Labor of the United States, under 
which the State agency of the State agrees to make payments of Disaster 
Unemployment Assistance in accordance with the Act and the regulations 
and procedures thereunder prescribed by the Secretary.
    (c) Announcement date means the first day on which the State agency 
publicly announces the availability of Disaster Unemployment Assistance 
in the State, pursuant to Sec.625.17.
    (d) Compensation means unemployment compensation as defined in 
section 85(b) of the Internal Revenue Code of 1986, and shall include 
any assistance or allowance payable to an individual with respect to 
such individual's unemployment under any State law or Federal 
unemployment compensation law unless such governmental unemployment 
compensation program payments are not considered ``compensation'' by 
ruling of the Internal Revenue Service or specific provision of Federal 
and/or State law because such payments are based on employee 
contributions which are not deductible from Federal income tax liability 
until the total nondeductible contributions paid by the employee to such 
program has been paid or are not ``compensation'' as defined under 
paragraph (d)(5) of this section. Governmental unemployment compensation 
programs include (but are not limited to) programs established under: a 
State law approved by the Secretary of Labor pursuant to section 3304 of 
the Internal Revenue Code, chapter 85 of title 5 of the United States 
Code, the Railroad Unemployment Insurance Act (45 U.S.C. 351 et seq.), 
any Federal supplementary compensation law, and trade readjustment 
allowances payable under chapter 2 of title II of the Trade Act of 1974 
(19 U.S.C. 2271 et seq.). ``Compensation'' also includes ``regular 
compensation'', ``additional compensation'', ``extended compensation'', 
``Federal supplementary compensation'', and ``disability payments'' 
defined as follows:
    (1) Regular compensation means compensation payable to an individual 
under any State law or the unemployment compensation plan of a political

[[Page 157]]

subdivision of a State and, when so payable, includes compensation 
payable pursuant to 5 U.S.C. chapter 85 (parts 609 and 614 of this 
chapter), but not including extended compensation or additional 
compensation.
    (2) Additional compensation means compensation totally financed by a 
State and payable under a State law by reason of conditions of high 
unemployment or by reason of other special factors, and, when so 
payable, includes compensation payable pursuant to 5 U.S.C. chapter 85.
    (3) Extended compensation means compensation payable to an 
individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970 (title 
II, Pub. L. 91-373; 84 Stat. 695, 708; part 615 of this chapter), as 
amended with respect to the payment of extended compensation, and, when 
so payable, includes additional compensation and compensation payable 
pursuant to 5 U.S.C. chapter 85.
    (4) Federal supplementary compensation means supplemental 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Disability payments means cash disability payments made pursuant 
to a governmental program as a substitute for cash unemployment payments 
to an individual who is ineligible for such payments solely because of 
the disability, except for payments made under workmen's compensation 
acts for personal injuries or sickness.
    (e) Date the major disaster began means the date a major disaster 
first occurred, as specified in the understanding between the Federal 
Emergency Management Agency and the Governor of the State in which the 
major disaster occurred.
    (f) Disaster Assistance Period means the period beginning with the 
first week following the date the major disaster began, and ending with 
the 26th week subsequent to the date the major disaster was declared.
    (g) Disaster Unemployment Assistance means the assistance payable to 
an individual eligible for the assistance under the Act and this part, 
and which is referred to as DUA.
    (h) Federal Coordinating Officer means the official appointed 
pursuant to section 302 of The Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, to operate in the affected major disaster 
area.
    (i) Governor means the chief executive of a State.
    (j) Initial application means the first application for DUA filed by 
an individual, on the basis of which the individual's eligibility for 
DUA is determined.
    (k) Major disaster means a major disaster as declared by the 
President pursuant to section 401 of The Robert T. Stafford Disaster 
Relief and Emergency Assistance Act.
    (l) Major disaster area means the area identified as eligible for 
Federal assistance by the Federal Emergency Management Agency, pursuant 
to a Presidential declaration of a major disaster.
    (m) Secretary means the Secretary of Labor of the United States.
    (n) Self-employed individual means an individual whose primary 
reliance for income is on the performance of services in the 
individual's own business, or on the individual's own farm.
    (o) Self-employment means services performed as a self-employed 
individual.
    (p) State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the United States Virgin 
Islands, the Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands, and the Trust Territory of the Pacific Islands.
    (q) State agency means--
    (1) In all States except the Territory of Guam, American Samoa, 
Commonwealth of the Northern Mariana Islands, Federated States of 
Micronesia, Republic of the Marshall Islands and the Trust Territory of 
the Pacific Islands, the agency administering the State law; and
    (2) In the Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the

[[Page 158]]

Marshall Islands and the Trust Territory of the Pacific Islands, the 
agency designated in the Agreement entered into by the State.
    (r)(1) State law means, with respect to--
    (i) The States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands, the unemployment 
compensation law of the State which has been approved under section 
3304(a) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)); and
    (ii) The Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
Hawaii Employment Security Law.
    (2) Applicable State law means, for an individual, the State law of 
the applicable State for an individual as provided in Sec.625.12.
    (s) Unemployed worker means an individual who was employed in or was 
to commence employment in the major disaster area at the time the major 
disaster began, and whose principal source of income and livelihood is 
dependent upon the individual's employment for wages, and whose 
unemployment is caused by a major disaster as provided in Sec.
625.5(a).
    (t) Unemployed self-employed individual means 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 the individual's 
performance of service in self-employment, and whose unemployment is 
caused by a major disaster as provided in Sec.625.5(b).
    (u) Wages means remuneration for services performed for another, 
and, with respect to a self-employed individual, net income from 
services performed in self-employment.
    (v) Week means a week as defined in the applicable State law.
    (w) Week of unemployment means--
    (1) For an unemployed worker, any week during which the individual 
is totally, part-totally, or partially unemployed. A week of total 
unemployment is a week during which the individual performs no work and 
earns no wages, or has less than full-time work and earns wages not 
exceeding the minimum earnings allowance prescribed in the applicable 
State law. A week of part-total unemployment is a week of otherwise 
total unemployment during which the individual has odd jobs or 
subsidiary work and earns wages not exceeding the maximum earnings 
allowance prescribed in the applicable State law. A week of partial 
unemployment is a week during which the individual works less than 
regular, full-time hours for the individual's regular employer, as a 
direct result of the major disaster, and earns wages not exceeding the 
maximum earnings allowance prescribed by the applicable State law.
    (2) For an unemployed self-employed individual, any week during 
which the individual is totally, part-totally, or partially unemployed. 
A week of total unemployment is a week during which the individual 
performs no services in self-employment or in an employer-employee 
relationship, or performs services less than full-time and earns wages 
not exceeding the minimum earnings allowance prescribed in the 
applicable State law. A week of part-total unemployment is a week of 
otherwise total unemployment during which the individual has odd jobs or 
subsidiary work and earns wages not exceeding the maximum earnings 
allowance prescribed in the applicable State law. A week of partial 
unemployment is a week during which the individual performs less than 
the customary full-time services in self-employment, as a direct result 
of the major disaster, and earns wages not exceeding the maximum 
earnings allowance prescribed by the applicable State law, or during 
which the only activities or services performed are for the sole purpose 
of enabling the individual to resume self-employment.
    (3) If the week of unemployment for which an individual claims DUA 
is a week with respect to which the individual is reemployed in a 
suitable position or has commenced services in self-employment, that 
week shall be treated as a week of partial unemployment

[[Page 159]]

if the week qualifies as a week of partial unemployment as defined in 
this paragraph.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 554, Jan. 5, 1990; 56 
FR 22805, May 16, 1991]



Sec.625.3  Reemployment assistance.

    (a) State assistance. Except as provided in paragraph (b) of this 
section, the applicable State shall provide, without reimbursement from 
any funds provided under the Act, reemployment assistance services under 
any other law administered by the State to individuals applying for DUA 
and all other individuals who are unemployed because of a major 
disaster. Such services shall include, but are not limited to, 
counseling, referrals to suitable work opportunities, and suitable 
training, to assist the individuals in obtaining reemployment in 
suitable positions as soon as possible.
    (b) Federal assistance. In the case of American Samoa, Commonwealth 
of the Northern Mariana Islands, Federated States of Micronesia, 
Republic of the Marshall Islands, and the Trust Territory of the Pacific 
Islands, the Department of Labor, in consultation with the Federal 
Emergency Management Agency, will determine what reemployment services 
are needed by DUA applicants, and if any available Federal programs of 
reemployment assistance services can be implemented in that 
jurisdiction.

[55 FR 554, Jan. 5, 1990; as amended at 56 FR 22806, May 16, 1991]



Sec.625.4  Eligibility requirements for Disaster Unemployment Assistance.

    An individual shall be eligible to receive a payment of DUA with 
respect to a week of unemployment, in accordance with the provisions of 
the Act and this part if:
    (a) That week begins during a Disaster Assistance Period;
    (b) The applicable State for the individual has entered into an 
Agreement which is in effect with respect to that week;
    (c) The individual is an unemployed worker or an unemployed self-
employed individual;
    (d) The individual's unemployment with respect to that week is 
caused by a major disaster, as provided in Sec.625.5;
    (e) The individual has filed a timely initial application for DUA 
and, as appropriate, a timely application for a payment of DUA with 
respect to that week;
    (f) That week is a week of unemployment for the individual;
    (g) The individual is able to work and available for work within the 
meaning of the applicable State law: Provided, That an individual shall 
be deemed to meet this requirement if any injury caused by the major 
disaster is the reason for inability to work or engage in self-
employment; or, in the case of an unemployed self-employed individual, 
the individual performs service or activities which are solely for the 
purpose of enabling the individual to resume self-employment;
    (h) The individual has not refused a bona fide offer of employment 
in a suitable position, or refused without good cause to resume or 
commence suitable self-employment, if the employment or self-employment 
could have been undertaken in that week or in any prior week in the 
Disaster Assistance Period; and
    (i) The individual is not eligible for compensation (as defined in 
Sec.625.2(d)) or for waiting period credit for such week under any 
other Federal or State law, except that an individual determined 
ineligible because of the receipt of disqualifying income shall be 
considered eligible for such compensation or waiting period credit. An 
individual shall be considered ineligible for compensation or waiting 
period credit (and thus potentially eligible for DUA) if the individual 
is under a disqualification for a cause that occurred prior to the 
individual's unemployment due to the disaster, or for any other reason 
is ineligible for compensation or waiting period credit as a direct 
result of the major disaster.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990]



Sec.625.5  Unemployment caused by a major disaster.

    (a) Unemployed worker. The unemployment of an unemployed worker is 
caused by a major disaster if--

[[Page 160]]

    (1) The individual has a ``week of unemployment'' as defined in 
Sec.625.2(w)(1) following the ``date the major disaster began'' as 
defined in Sec.625.2(e), and such unemployment is a direct result of 
the major disaster; or
    (2) The individual is unable to reach the place of employment as a 
direct result of the major disaster; or
    (3) The individual was to commence employment and does not have a 
job or is unable to reach the job as a direct result of the major 
disaster; or
    (4) The individual has become the breadwinner or major support for a 
household because the head of the household has died as a direct result 
of the major disaster; or
    (5) The individual cannot work because of an injury caused as a 
direct result of the major disaster.
    (b) Unemployed self-employed individual. The unemployment of an 
unemployed self-employed individual is caused by a major disaster if--
    (1) The individual has a ``week of unemployment'' as defined in 
Sec.625.2(w)(2) following the ``date the major disaster began'' as 
defined in Sec.625.2(e), and such unemployment is a direct result of 
the major disaster; or
    (2) The individual is unable to reach the place where services as a 
self-employed individual are performed, as a direct result of the major 
disaster; or
    (3) The individual was to commence regular services as a self-
employed individual, but does not have a place or is unable to reach the 
place where the services as a self-employed individual were to be 
performed, as a direct result of the major disaster; or
    (4) The individual cannot perform services as a self-employed 
individual because of an injury caused as a direct result of the major 
disaster.
    (c) Unemployment is a direct result of the major disaster. For the 
purposes of paragraphs (a)(1) and (b)(1) of this section, a worker's or 
self-employed individual's unemployment is a direct result of the major 
disaster where the unemployment is an immediate result of the major 
disaster itself, and not the result of a longer chain of events 
precipitated or exacerbated by the disaster. Such an individual's 
unemployment is a direct result of the major disaster if the 
unemployment resulted from:
    (1) The physical damage or destruction of the place of employment;
    (2) The physical inaccessibility of the place of employment in the 
major disaster area due to its closure by or at the request of the 
federal, state or local government, in immediate response to the 
disaster; or
    (3) Lack of work, or loss of revenues, provided that, prior to the 
disaster, the employer, or the business in the case of a self-employed 
individual, received at least a majority of its revenue or income from 
an entity in the major disaster area that was either damaged or 
destroyed in the disaster, or an entity in the major disaster area 
closed by the federal, state or local government in immediate response 
to the disaster.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990; 56 
FR 22806, May 16, 1991; 66 FR 56962, Nov. 13, 2001; 68 FR 10937, Mar. 6, 
2003]



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

[[Page 161]]

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.

[[Page 162]]

    (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 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 VI (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

[[Page 163]]

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.

[60 FR 25568, May 11, 1995, as amended at 71 FR 35516, June 21, 2006]



Sec.625.7  Disaster Unemployment Assistance: Duration.

    DUA shall be payable to an eligible unemployed worker or eligible 
unemployed self-employed individual for all weeks of unemployment which 
begin during a Disaster Assistance Period.



Sec.625.8  Applications for Disaster Unemployment Assistance.

    (a) Initial application. An initial application for DUA shall be 
filed by an individual with the State agency of the applicable State 
within 30 days after the announcement date of the major disaster as the 
result of which the individual became unemployed, and on a form 
prescribed by the Secretary which shall be furnished to the individual 
by the State agency. An initial application filed later than 30 days 
after the announcement date of the major disaster shall be accepted as 
timely by the State agency if the applicant had good cause for the late 
filing, but in no event shall an initial application be accepted by the 
State agency if it is filed after the expiration of the Disaster 
Assistance Period. If the 30th day falls on a Saturday, Sunday, or a 
legal holiday in the major disaster area, the 30-day time limit shall be 
extended to the next business day.
    (b) Weekly applications. Applications for DUA for weeks of 
unemployment shall be filed with respect to the individual's applicable 
State at the times and in the manner as claims for regular compensation 
are filed under the applicable State law, and on forms prescribed by the 
Secretary which shall be furnished to the individual by the State 
agency.
    (c) Filing in person. (1) Except as provided in paragraph (c)(2) of 
this section, all applications for DUA, including initial applications, 
shall be filed in person.

[[Page 164]]

    (2) Whenever an individual has good cause for not filing any 
application for DUA in person, the application shall be filed at such 
time, in such place, and in such a manner as directed by the State 
agency and in accordance with this part and procedures prescribed by the 
Secretary.
    (d) IBPP. The ``Interstate Benefit Payment Plan'' shall apply, where 
appropriate, to an individual filing applications for DUA.
    (e) Wage combining. The ``Interstate Arrangement for Combining 
Employment and Wages'' (part 616 of this chapter) shall apply, where 
appropriate, to an individual filing applications for DUA: Provided, 
That the ``Paying State'' shall be the applicable State for the 
individual as prescribed in Sec.625.12.
    (f) Procedural requirements. (1) The procedures for reporting and 
filing applications for DUA shall be consistent with this part, and with 
the Secretary's ``Standard for Claim Filing, Claimant Reporting, Job 
Finding and Employment Services,'' Employment Security Manual. Part V, 
sections 5000 et seq. (appendix A of this part), insofar as such 
standard is not inconsistent with this part.
    (2) The provisions of the applicable State law which apply hereunder 
to applications for and the payment of DUA shall be applied consistent 
with the requirements of title III of the Social Security Act and the 
Federal Unemployment Tax Act which are pertinent in the case of regular 
compensation, including but not limited to those standards and 
requirements specifically referred to in the provisions of this part.

(Approved by the Office of Management and Budget under control number 
1205-0051)

(Pub. L. No. 96-511)

[42 FR 46712, Sept. 16, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
55 FR 555, Jan. 5, 1990]



Sec.625.9  Determinations of entitlement; notices to individual.

    (a) Determination of initial application. (1) The State agency shall 
promptly, upon the filing of an initial application for DUA, determine 
whether the individual is eligible, and if the individual is found to be 
eligible, the weekly amount of DUA payable to the individual and the 
period during which DUA is payable.
    (2) An individual's eligibility for DUA shall be determined, where a 
reliable record of employment, self-employment and wages is not 
obtainable, on the basis of an affidavit submitted to the State agency 
by the individual, and on a form prescribed by the Secretary which shall 
be furnished to the individual by the State agency.
    (b) Determinations of weekly applications. The State agency shall 
promptly, upon the filing of an application for a payment of DUA with 
respect to a week of unemployment, determine whether the individual is 
entitled to a payment of DUA with respect to that week, and, if 
entitled, the amount of DUA to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to regular compensation 
under the applicable State law shall apply to determinations pertaining 
to DUA.
    (d) Notices to individual. The State agency shall give notice in 
writing to the individual, by the most expeditious method, of any 
determination or redetermination of an initial application, and of any 
determination of an application for DUA with respect to a week of 
unemployment which denies DUA or reduces the weekly amount initially 
determined to be payable, and of any redetermination of an application 
for DUA with respect to a week of unemployment. Each notice of 
determination or redetermination shall include such information 
regarding the determination or redetermination and notice of right to 
reconsideration or appeal, or both, as is furnished with written notices 
of determination and written notices of redeterminations with respect to 
claims for regular compensation.
    (e) Promptness. Full payment of DUA when due shall be made with the 
greatest promptness that is administratively feasible.
    (f) Secretary's Standard. The procedures for making determinations 
and

[[Page 165]]

redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for DUA, 
shall be consistent with this part and with the Secretary's ``Standard 
for Claim Determinations--Separation Information,'' Employment Security 
Manual. Part V, sections 6010 et seq. (Appendix B of this part).

(Approved by the Office of Management and Budget under control number 
1205-0051)

(Pub. L. No. 96-511)

[42 FR 46712, Sept. 16, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
55 FR 555, Jan. 5, 1990]



Sec.625.10  Appeal and review.

    (a) States of the United States. (1) Any determination or 
redetermination made pursuant to Sec.625.9, by the State agency of a 
State (other than the State agency of the Territory of Guam, American 
Samoa, Commonwealth of the Northern Mariana Islands, Federated States of 
Micronesia, Republic of the Marshall Islands, or the Trust Territory of 
the Pacific Islands) may be appealed by the applicant in accordance with 
the applicable State law to the first-stage administrative appellate 
authority in the same manner and to the same extent as a determination 
or redetermination of a right to regular compensation may be appealed 
under the applicable State law, except that the period for appealing 
shall be 60 days from the date the determination or redetermination is 
issued or mailed instead of the appeal period provided for in the 
applicable State law. Any decision on a DUA first-stage appeal must be 
made and issued within 30 days after receipt of the appeal by the State.
    (2) Notice of the decision on appeal, and the reasons therefor, 
shall be given to the individual by delivering the notice to such 
individual personally or by mailing it to the individual's last known 
address, whichever is most expeditious. The decision shall contain 
information as to the individual's right to review of the decision by 
the appropriate Regional Administrator, Employment and Training 
Administration, if requested within 15 days after the decision was 
mailed or delivered in person to the individual. The notice will include 
the manner of requesting such review, and the complete address of the 
Regional Administrator. Notice of the decision on appeal shall be given 
also to the State agency (with the same notice of right to review) and 
to the appropriate Regional Administrator.
    (b) Guam, American Samoa, and the Trust Territory of the Pacific 
Islands. (1) In the case of an appeal by an individual from a 
determination or redetermination by the State agency of the Territory of 
Guam, American Samoa, Commonwealth of the Northern Mariana Islands, 
Federated States of Micronesia, Republic of the Marshall Islands, or the 
Trust Territory of the Pacific Islands, the individual shall be entitled 
to a hearing and decision in accordance with Sec.625.30 of this part.
    (2) Notice of the referee's decision, and the reasons therefor, 
shall be given to the individual by delivering the notice to the 
individual personally or by mailing it to the individual's last known 
address, whichever is most expeditious. The notice of decision shall 
contain information as to the individual's right to review of the 
decision by the Regional Administrator, Employment and Training 
Administration, for Region VI (San Francisco), and the manner of 
obtaining such review, including the address of the Regional 
Administrator. Notice of the decision on appeal shall be given also to 
the State agency and to the Regional Administrator.
    (c) Review by Regional Administrator. (1) The appropriate Regional 
Administrator, Employment and Training Administration, upon request for 
review by an applicant or the State agency shall, or upon the Regional 
Administrator's own motion may, review a decision on appeal issued 
pursuant to paragraph (a) or (b) of this section.
    (2) Any request for review by an applicant or a State agency shall 
be filed, and any review on the Regional Administrator's own motion 
shall be undertaken, within 15 days after notice of the decision on 
appeal was delivered or mailed to the individual.
    (3)(i) A request for review by an individual may be filed with the 
appropriate State agency, which shall forward the request to the 
appropriate Regional Administrator, Employment and

[[Page 166]]

Training Administration, or may be filed directly with the appropriate 
Regional Administrator.
    (ii) A request for review by a State agency shall be filed with the 
appropriate Regional Administrator, and a copy shall be served on the 
individual by delivery to the individual personally or by mail to the 
individual's last known address.
    (iii) When a Regional Administrator undertakes a review of a 
decision on the Regional Administrator's own motion, notice thereof 
shall be served promptly on the individual and the State agency.
    (iv) Whenever review by a Regional Administrator is undertaken 
pursuant to an appeal or on the Regional Administrator's own motion, the 
State agency shall promptly forward to the Regional Administrator the 
entire record of the case.
    (v) Where service on the individual is required by paragraph 
(c)(3)(ii) of this section, adequate proof of service shall be furnished 
for the record before the Regional Administrator, and be a condition of 
the Regional Administrator undertaking review pursuant to this 
paragraph.
    (4) The decision of the Regional Administrator on review shall be 
rendered promptly, and not later than the earlier of--
    (i) 45 days after the appeal is received or is undertaken by the 
Regional Administrator, or
    (ii) 90 days from the date the individual's appeal from the 
determination or redetermination was received by the State agency.
    (5) Notice of the Regional Administrator's decision shall be mailed 
promptly to the last known address of the individual, to the State 
agency of the applicable State, and to the Administrator, Office of 
Workforce Security. The decision of the Regional Administrator shall be 
the final decision under the Act and this part, unless there is further 
review by the Assistant Secretary as provided in paragraph (d) of this 
section.
    (d) Further review by the Assistant Secretary. (1) The Assistant 
Secretary for Employment and Training on his or her own motion may 
review any decision by a Regional Administrator issued pursuant to 
paragraph (c) of this section.
    (2) Notice of a motion for review by the Assistant Secretary shall 
be given to the applicant, the State agency of the applicable State, the 
appropriate Regional Administrator, and the Administrator, Office of 
Workforce Security.
    (3) When the Regional Administrator and the State agency are 
notified of the Assistant Secretary's motion for review, they shall 
forward all records in the case to the Assistant Secretary.
    (4) Review by the Assistant Secretary shall be solely on the record 
in the case, any other written contentions or evidence requested by the 
Assistant Secretary, and any further evidence or arguments offered by 
the individual, the State agency, the Regional Administrator, or the 
Administrator, Office of Workforce Security, which are mailed to the 
Assistant Secretary within 15 days after mailing the notice of motion 
for review.
    (5) Upon review of a case under this paragraph, the Assistant 
Secretary may affirm, modify, or reverse the decision of the Regional 
Administrator, and may remand the case for further proceedings and 
decision in accordance with the Assistant Secretary's decision.
    (6) The decision of the Assistant Secretary shall be made promptly, 
and notice thereof shall be sent to the applicant, the State agency, the 
Regional Administrator, and the Administrator, Office of Workforce 
Security.
    (7) The decision of the Assistant Secretary shall be final and 
conclusive, and binding on all interested parties, and shall be a 
precedent applicable throughout the States.
    (e) Procedural requirements. (1) All decisions on first-stage 
appeals from determinations or redeterminations by the State agencies 
must be made within 30 days of the appeal; therefore, the Secretary's 
``Standard for Appeals Promptness-Unemployment Compensation'' in part 
650 of this chapter shall not apply to the DUA program.
    (2) The provisions on right of appeal and opportunity for hearing 
and review with respect to applications for DUA shall be consistent with 
this part and with sections 303(a)(1) and 303(a)(3) of

[[Page 167]]

the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (3) Any petition or other matter required to be filed within a time 
limit under this section shall be deemed to be filed at the time it is 
delivered to an appropriate office, or at the time of the postmark if it 
is mailed via the United States Postal Service to an appropriate office.
    (4) If any limited time period specified in this section ends on a 
Saturday, Sunday, or a legal holiday in the major disaster area, the 
time limit shall be extended to the next business day.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990; 56 
FR 22805, May 16, 1991; 71 FR 35516, June 21, 2006]



Sec.625.11  Provisions of State law applicable.

    The terms and conditions of the State law of the applicable State 
for an individual, which apply to claims for, and the payment of regular 
compensation, shall apply to applications for, and the payment of, DUA 
to each such individual, only as specifically set forth in the 
provisions of this part.



Sec.625.12  The applicable State for an individual.

    (a) Applicable State. The applicable State for an individual shall 
be that State in which the individual's unemployment is the result of a 
major disaster.
    (b) Limitation. DUA is payable to an individual only by an 
applicable State as determined pursuant to paragraph (a) of this 
section, and--
    (1) Only pursuant to an Agreement entered into pursuant to the Act 
and this part, and with respect to weeks in which the Agreement is in 
effect; and
    (2) Only with respect to weeks of unemployment that begin during a 
Disaster Assistance Period.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990; 71 
FR 35516, June 21, 2006]



Sec.625.13  Restrictions on entitlement; disqualification.

    (a) Income reductions. The amount of DUA payable to an individual 
for a week of unemployment, as computed pursuant to Sec.625.6, shall 
be reduced by the amount of any of the following that an individual has 
received for the week or would receive for the week if the individual 
filed a claim or application therefor and took all procedural steps 
necessary under the appropriate law, contract, or policy to receive such 
payment:
    (1) Any benefits or insurance proceed from any source not defined as 
``compensation'' under Sec.625.2(d) for loss of wages due to illness 
or disability;
    (2) A supplemental unemployment benefit pursuant to a collective 
bargaining agreement.
    (3) Private income protection insurance;
    (4) Any workers' compensation by virtue of the death of the head of 
the household as the result of the major disaster in the major disaster 
area, prorated by weeks, if the individual has become the head of the 
household and is seeking suitable work because the head of the household 
died as the result of the major disaster in the major disaster area; and
    (5) The prorated amount of a retirement pension or annuity under a 
public or private retirement plan or system, prorated, where necessary, 
by weeks, but only if, and to the extent that, such amount would be 
deducted from regular compensation payable under the applicable State 
law.
    (6) The prorated amount of primary benefits under title II of the 
Social Security Act, but only to the extent that such benefits would be 
deduced from regular compensation if payable to the individual under the 
applicable State law.
    (b) Disqualification. (1) An individual shall not be entitled to DUA 
for any week after the week in which the individual is reemployed in a 
suitable position.
    (2) An individual who refuses without good cause to accept a bona 
fide offer of reemployment in a position suitable to the individual, or 
to investigate or accept a referral to a position which is suitable to 
and available to the individual, shall not be entitled to DUA with 
respect to the week in which such refusal occurs or in any subsequent 
week in the Disaster Assistance Period. For the purposes of this 
paragraph, a position shall not be deemed to be suitable for an 
individual if the circumstances present any unusual risk

[[Page 168]]

to the health, safety, or morals of the individual, if it is 
impracticable for the individual to accept the position, or if 
acceptance for the position would, as to the individual, be inconsistent 
with any labor standard in section 3304(a)(5) of the Federal 
Unemployment Tax Act, 26 U.S.C. 3304(a)(5), or the comparable provisions 
of the applicable State law.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec.625.14  Overpayments; disqualification for fraud.

    (a) Finding and repayment. If the State agency of the applicable 
State finds that an individual has received a payment of DUA to which 
the individual was not entitled under the Act and this part, whether or 
not the payment was due to the individual's fault or misrepresentation, 
the individual shall be liable to repay to the applicable State the 
total sum of the payment to which the individual was not entitled, and 
the State agency shall take all reasonable measures authorized under any 
State law or Federal law to recover for the account of the United States 
the total sum of the payment to which the individual was not entitled.
    (b) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any outstanding overpayment of DUA made to 
the individual by the State, by deductions from any DUA payable to the 
individual under the Act and this part, or from any compensation payable 
to the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) The State agency shall also recover, insofar as possible, the 
amount of any outstanding overpayment of DUA made to the individual by 
another State, by deductions from any DUA payable by the State agency to 
the individual under the Act and this part, or from any compensation 
payable to the individual under any Federal unemployment compensation 
law administered by the State agency, or from any assistance or 
allowance payable to the individual with respect to unemployment under 
any other Federal law administered by the State agency.
    (3) If the State has in effect an agreement to implement the cross-
program offset provisions of section 303(g)(2) of the Social Security 
Act (42 U.S.C. 503(g)(2)), the State shall apply the provisions of such 
agreement to the recovery of outstanding DUA overpayments.
    (c) Debts due the United States. DUA payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person.
    (d) Recovered overpayments. Overpayments recovered in any manner 
shall be credited or returned, as the case may be, to the appropriate 
account of the United States.
    (e) Application of State law. Any provision of State law authorizing 
waiver of recovery of overpayments of compensation shall not be 
applicable to DUA.
    (f) Final decision. Recovery of any overpayment of DUA shall not be 
enforced by the State agency until the determination establishing the 
overpayment has become final, or if appeal is taken from the 
determination, until the decision after opportunity for a fair hearing 
has become final.
    (g) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (f) of Sec.625.9 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec.625.10 shall apply to determinations and 
redeterminations made pursuant to this section.
    (h) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of DUA shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to regular compensation and 
consistent with the Secretary's ``Standard for Fraud and Overpayment 
Detection,'' Employment Security Manual, part V, sections 7510 et seq. 
(Appendix C of this part).
    (i) Disqualification for fraud. Any individual who, with respect to 
a major

[[Page 169]]

disaster, makes or causes another to make a false statement or 
misrepresentation of a material fact, knowing it to be false, or 
knowingly fails or causes another to fail to disclose a material fact, 
in order to obtain for the individual or any other person a payment of 
DUA to which the individual or any other person is not entitled, shall 
be disqualified as follows:
    (1) If the false statement, misrepresentation, or nondisclosure 
pertains to an initial application for DUA--
    (i) The individual making the false statement, misrepresentation, or 
nondisclosure shall be disqualified from the receipt of any DUA with 
respect to that major disaster; and
    (ii) If the false statement, misrepresentation, or nondisclosure was 
made on behalf of another individual, and was known to such other 
individual to be a false statement, misrepresentation, or nondisclosure, 
such other individual shall be disqualified from the receipt of any DUA 
with respect to that major disaster; and
    (2) If the false statement, misrepresentation, or nondisclosure 
pertains to a week for which application for a payment of DUA is made--
    (i) The individual making the false statement, misrepresentation, or 
nondisclosure shall be disqualified from the receipt of DUA for that 
week and the first two compensable weeks in the Disaster Assistance 
Period that immediately follow that week, with respect to which the 
individual is otherwise entitled to a payment of DUA; and
    (ii) If the false statement, misrepresentation, or nondisclosure was 
made on behalf of another individual, and was known to such other 
individual to be a false statement, misrepresentation, or nondisclosure, 
such other individual shall be disqualified from the receipt of DUA for 
that week and the first two compensable weeks in the Disaster Assistance 
Period that immediately follow that week, with respect to which the 
individual is otherwise entitled to a payment of DUA.
    (j) Criminal penalties. The provisions of this section on recovery 
of overpayments and disqualification for fraudulently claiming or 
receiving any DUA to which an individual was not entitled under the Act 
and this part shall be in addition to and shall not preclude any 
applicable criminal prosecution and penalties under State or Federal 
law.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990; 71 
FR 35516, June 21, 2006]



Sec.625.15  Inviolate rights to DUA.

    Except as specifically provided in this part, the right of 
individuals to DUA shall be protected in the same manner and to the same 
extent as the rights of persons to regular unemployment compensation are 
protected under the applicable State law. Such measures shall include 
protection of applicants for DUA from waiver, release, assignment, 
pledge, encumbrance, levy, execution, attachment, and garnishment, of 
their rights to DUA. In the same manner and to the same extent, 
individuals shall be protected from discrimination and obstruction in 
regard to seeking, applying for and receiving any right to DUA.



Sec.625.16  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Act as the Secretary requires, 
and will make all such records available for inspection, examination, 
and audit by such Federal officials or employees as the Secretary may 
designate or as may be required by law.
    (b) Disclosure of information. Information in records made and 
maintained by a State agency in administering the Act shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
regular compensation and the entitlement of individuals thereto may be 
disclosed under the applicable State law, and consistently with section 
303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1). This 
provision on the confidentiality of information obtained in the 
administration of the Act shall not apply, however, to the United States 
Department of Labor, or in the case of information, reports and studies 
requested pursuant to Sec.625.19, or where the result would be 
inconsistent with the Freedom of Information Act (5 U.S.C. 552), the 
Privacy Act of 1974 (5 U.S.C. 552a), or regulations of

[[Page 170]]

the United States Department of Labor promulgated thereunder.



Sec.625.17  Announcement of the beginning of a Disaster Assistance Period.

    Whenever a major disaster is declared in a State, the State agency 
shall promptly announce throughout the major disaster area by all 
appropriate news media that individuals who are unemployed as the result 
of the major disaster may be entitled to DUA; that they should file 
initial applications for DUA as soon as possible, but not later than the 
30th day after the announcement date; the beginning date of the Disaster 
Assistance Period; and where individuals may obtain further information 
and file applications for DUA.



Sec.625.18  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec.625.19  Information, reports and studies.

    (a) Routine responses. State agencies shall furnish to the Secretary 
such information and reports and make such studies as the Secretary 
decides are necessary or appropriate for carrying out the purposes of 
the Act and this part.
    (b) Final report. In addition to such other reports as may be 
required by the Secretary, within 60 days after all payments of Disaster 
Unemployment Assistance as the result of a major disaster in the State 
have been made, the State agency shall submit a final report to the 
Secretary. A final report shall contain a narrative summary, a 
chronological list of significant events, pertinent statistics about the 
Disaster Unemployment Assistance provided to disaster victims, brief 
statements of major problems encountered, discussion of lessons learned, 
and suggestions for improvement of the program during future major 
disasters.

(Approved by the Office of Management and Budget under control number 
1205-0051)

(Pub. L. No. 96-511)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984]



Sec.625.20  [Reserved]



Sec.625.30  Appeal Procedures for Guam, American Samoa,
Commonwealth of the Northern Mariana Islands, Federated States
of Micronesia, Republic of the Marshall Islands, and the Trust
Territory of the Pacific Islands.

    (a) Designation of referee. The Director of the Unemployment 
Insurance Service shall designate a referee of a State agency to hear 
and decide appeals under this section from determinations and 
redeterminations by the State agencies of the Territory of Guam, 
American Samoa, Commonwealth of the Northern Mariana Islands, Federated 
States of Micronesia, Republic of the Marshall Islands, and the Trust 
Territory of the Pacific Islands.
    (b) Appeals to referee. (1) A DUA applicant may appeal from a 
determination or redetermination issued by the State agency of the 
Territory of Guam, American Samoa, Commonwealth of the Northern Mariana 
Islands, Federated States of Micronesia, Republic of the Marshall 
Islands, or the Trust Territory of the Pacific Islands within 60 days 
after the mailing of notice and a copy of such determination or 
redetermination to such applicant's last known address, or in the 
absence of mailing within 60 days after delivery in person thereof to 
such applicant. The appeal shall be in writing and may be filed with any 
office of the State agency.
    (2) Notice that an appeal has been filed may be given or mailed, in 
the discretion of the referee, to any person who has offered or is 
believed to have evidence with respect to the claim.
    (3) An appeal shall be promptly scheduled and heard, in order that a 
decision on the appeal can be issued within 30 days after receipt of the 
appeal by the State agency. Written notice of hearing, specifying the 
time and place

[[Page 171]]

thereof and those questions known to be in dispute, shall be given or 
mailed to the applicant, the State agency, and any person who has 
offered or is believed to have evidence with respect to the claim 7 days 
or more before the hearing, except that a shorter notice period may be 
used with the consent of the applicant.
    (c) Conduct of hearings. Hearings before the referee shall be 
informal, fair, and impartial, and shall be conducted in such manner as 
may be best suited to determine the DUA applicants' right to 
compensation. Hearings shall be open to the public unless sufficient 
cause for a closed hearing is shown. The referee shall open a hearing by 
ascertaining and summarizing the issue or issues involved in the appeal. 
The applicant may examine and cross-examine witnesses, inspect 
documents, and explain or rebut any evidence. An opportunity to present 
argument shall be afforded such applicant, and such argument shall be 
made part of the record. The referee shall give such applicant, if not 
represented by counsel or other representative, every assistance that 
does not interfere with the impartial discharge of the referee's duties. 
The referee may examine such applicant and other witnesses to such 
extent as the referee deems necessary. Any issue involved in the claim 
shall be considered and passed upon even though such issue was not set 
forth as a ground of appeal.
    (d) Evidence. Oral or written evidence of any nature, whether or not 
conforming to the legal rules of evidence, may be accepted. Any official 
record of the State agency, including reports submitted in connection 
with administration of the DUA program, may be included in the record if 
the applicant is given an opportunity to examine and rebut the same. A 
written statement under oath or affirmation may be accepted when it 
appears impossible or unduly burdensome to require the attendance of a 
witness, but a DUA applicant adversely affected by such a statement must 
be given the opportunity to examine such statement, to comment on or 
rebut any or all portions thereof, and whenever possible to cross-
examine a witness whose testimony has been introduced in written form by 
submitting written questions to be answered in writing.
    (e) Record. All oral testimony before the referee shall be taken 
under oath or affirmation and a transcript thereof shall be made and 
kept. Such transcript together with all exhibits, papers, and requests 
filed in the proceeding shall constitute the record for decision.
    (f) Withdrawal of appeal. A DUA applicant who has filed an appeal 
may withdraw such appeal with the approval of the referee.
    (g) Nonappearance of DUA applicant. Failure of a DUA applicant to 
appear at a hearing shall not result in a decision being automatically 
rendered against such applicant. The referee shall render a decision on 
the basis of whatever evidence is properly before him/her unless there 
appears to be a good reason for continuing the hearing. An applicant who 
fails to appear at a hearing with respect to his/her appeal may within 
seven days thereafter petition for a reopening of the hearing. Such 
petition shall be granted if it appears to the referee that such 
applicant has shown good cause for his/her failure to attend.
    (h) Notice of referee's decision and further review--(1) Decision. A 
copy of the referee's decision, which shall include findings and 
conclusions, shall promptly be given or mailed to the applicant, the 
State agency, and to the Regional Administrator, Employment and Training 
Administration, for Region VI (San Francisco). The decision of the 
referee shall be accompanied by an explanation of the right of such 
applicant or State agency to request review by the Regional 
Administrator and the time and manner in which such review may be 
instituted, as provided in paragraph (a)(2) of Sec.625.10.
    (2) Time limit for decision. A decision on an appeal to a referee 
under this section shall be made and issued by the referee not later 
than 30 days after receipt of the appeal by the State agency.
    (3) Further review. Further review by the Regional Administrator or 
the Assistant Secretary with respect to an appeal under this section 
shall be in accordance with paragraphs (c) and (d) of Sec.625.10.

[[Page 172]]

    (i) Consolidation of appeals. The referee may consolidate appeals 
and conduct joint hearings thereon where the same or substantially 
similar evidence is relevant and material to the matters in issue. 
Reasonable notice of consolidation and the time and place of hearing 
shall be given or mailed to the applicants or their representatives, the 
State agency, and to persons who have offered or are believed to have 
evidence with respect to the DUA claims.
    (j) Representation. A DUA applicant may be represented by counsel or 
other representative in any proceedings before the referee or the 
Regional Administrator. Any such representative may appear at any 
hearing or take any other action which such applicant may take under 
this part. The referee, for cause, may bar any person from representing 
an applicant, in which event such action shall be set forth in the 
record. No representative shall charge an applicant more than an amount 
fixed by the referee for representing the applicant in any proceeding 
under this section.
    (k) Postponement, continuance, and adjournment of hearings. A 
hearing before the referee shall be postponed, continued, or adjourned 
when such action is necessary to afford a DUA applicant reasonable 
opportunity for a fair hearing. In such case notice of the subsequent 
hearing shall be given to any person who received notice of the prior 
hearing.
    (l) Information from agency records. Information shall be available 
to a DUA applicant, either from the records of the State agency or as 
obtained in any proceeding herein provided for, to the extent necessary 
for proper presentation of his/her case. All requests for information 
shall state the nature of the information desired as clearly as possible 
and shall be in writing unless made at a hearing.
    (m) Filing of decisions. Copies of all decisions of the referee 
shall be kept on file at his/her office or agency for at least 3 years.

[55 FR 557, Jan. 5, 1990, as amended at 56 FR 22805, May 16, 1991; 71 FR 
35516, June 21, 2006]



    Sec. Appendix A to Part 625--Standard for Claim Filing, Claimant 
             Reporting, Job Finding, and Employment Services

         Employment Security Manual (Part V, Sections 5000-5004)

  5000 Standard for Claim Filing, Claimant Reporting, Job Finding, and 
                           Employment Services

    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for: ``Payment of unemployment 
compensation solely through public employment offices or such other 
agencies as the Secretary may approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law provide 
for: ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for: ``Such methods of administration . . . as are found by 
the Secretary to be reasonably calculated to insure full payment of 
unemployment compensation when due.''
    B. Secretary's interpretation of federal law requirements: 1. The 
Secretary interprets section 3304(a)(1) of the Federal Unemployment Tax 
Act and section 303(a)(2) of the Social Security Act to require that a 
State law provide for payment of unemployment compensation solely 
through public employment offices or claims offices administered by the 
State employment security agency if such agency provides for such 
coordination in the operations of its public employment offices and 
claims offices as will insure (a) the payment of benefits only to 
individuals who are unemployed and who are able to work and available 
for work, and (b) that individuals claiming unemployment compensation 
(claimants) are afforded such placement and other employment services as 
are necessary and appropriate to return them to suitable work as soon as 
possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for: a. Such contact by claimants with public 
employment offices or claims offices or both, (1) as will reasonably 
insure the payment of unemployment compensation only to individuals who 
are unemployed and who are able to work and available for work, and (2) 
that claimants are afforded such placement and other employment services 
as are necessary and appropriate to facilitate their return to suitable 
work as soon as possible; and b. Methods of administration which do not 
unreasonably limit the opportunity of

[[Page 173]]

individuals to establish their right to unemployment compensation due 
under such State law.

   5001 Claim Filing and Claimant Reporting Requirements Designed To 
                   Satisfy Secretary's Interpretation

    A. Claim filing--total or part-total unemployment: 1. Individuals 
claiming unemployment compensation for total or part-total unemployment 
are required to file a claim weekly or biweekly, in person or by mail, 
at a public employment office or a claims office (these terms include 
offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person: a. His new claim with respect to a benefit year, or his 
continued claim for a waiting week or for his first compensable week of 
unemployment in such year; and b. Any other claim, when requested to do 
so by the claims personnel at the office at which he files his claim(s) 
because questions about his right to benefits are raised by 
circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirements; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances: a. He is located in an area requiring the 
expenditure of an unreasonable amount of time or money in traveling to 
the nearest facility established by the State agency for filing claims 
in person; b. Conditions make it impracticable for the agency to take 
claims in person; c. He has returned to full-time work on or before the 
scheduled date for his filing a claim, unless the agency makes provision 
for in-person filing at a time and place that does not interfere with 
his employment; d. The agency finds that he has good cause for failing 
to file a claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

   5002 Requirement for Job Finding, Placement, and other Employment 
         Services Designed To Satisfy Secretary's Interpretation

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency: 1. The claims personnel 
are required to give each claimant such necessary and appropriate 
assistance as they reasonably can in finding suitable work and at their 
discretion determine when more complete placement and employment 
services are necessary and appropriate for a claimant; and if they 
determine more complete services are necessary and appropriate, the 
claims personnel are to refer him to employment service personnel in the 
public employment office in which he has been filing claim(s), or, if he 
has been filing in a claims office, in the public employment office most 
accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.
    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term

[[Page 174]]

temporary layoff with a fixed return date, the only service necessary 
and appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel are required to 
so arrange and coordinate the contracts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) his failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

             5004 Evaluation of Alternative State Provisions

    If the State law provisions do not conform to the ``suggested State 
law requirements'' set forth in sections 5001 and 5002, but the State 
law contains alternative provisions, the Manpower Administrator, in 
collaboration with the State agency, will study the actual or 
anticipated affect of the alternative provisions. If the Manpower 
Administrator concludes that the alternative provisions satisfy the 
requirements of the Federal law as construed by the Secretary (see 
section 5000 B) he will so notify the State agency. If he does not so 
conclude, he will submit the matter to the Secretary. If the Secretary 
concludes that the alternative provisions satisfy such requirements, the 
State agency will be so notified. If the Secretary concludes that there 
is a question as to whether the alternative provisions satisfy such 
requirements, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.5.

[55 FR 558, Jan. 5, 1990]



    Sec. Appendix B to Part 625--Standard for Claim Determinations--
                         Separation Information

         Employment Security Manual (Part V, Sections 6010-6015)

   6010-6019 Standard for Claim Determinations--Separation Information

    6010 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for: ``Such 
methods of administration . . . as are found by the Secretary to be 
reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for: ``Opportunity for a fair hearing before an 
impartial tribunal, for all individuals whose claims for unemployment 
compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for: ``Expenditure of all money withdrawn from an unemployment 
fund of such State, in the payment of unemployment compensation . . . 
.''
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that: A. Individuals who may be 
entitled to unemployment compensation are furnished

[[Page 175]]

such information as will reasonably afford them an opportunity to know, 
establish, and protect their rights under the unemployment compensation 
law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012 Criteria for Review of State Law Conformity with Federal 
Requirements. In determining the conformity of a State law with the 
above requirements of the Federal Unemployment Tax Act and the Social 
Security Act as interpreted by the Secretary, the following criteria 
will be applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?

 6013 Claim Determinations Requirements Designed To Meet Department of 
                             Labor Criteria.

    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his application identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except

[[Page 176]]

that written notice of determination need not be given with respect to:
---------------------------------------------------------------------------

    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it (1) results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2 f (1). However, a written notice of determination 
is required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2 f 
(2) and 2 h. However, a written notice of determination is required if: 
(a) there is a dispute concerning the denial or reduction of benefits 
with respect to such week; or (b) there is a change in the State law (or 
in the application thereof) affecting the denial or reduction; or (c) 
there is a change in the amount of the reduction except as to the 
balance covered by the last reduction in a series of reductions.

    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.

    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits

[[Page 177]]

    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c(1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimaint's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    1. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:

[[Page 178]]

    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ---------------- 
(name of pamphlet or booklet) heretofore furnished to you.''

6014 Separation Information Requirements Designed To Meet Department of 
                             Labor Criteria

    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information of worker. 1. Information required to be given. 
Employers are required to give their employees information and 
instructions concerning the employees' potential rights to benefits and 
concerning registration for work and filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever

[[Page 179]]

the worker is unemployed, wishes to apply for benefits, and to seek a 
job.
    6015 Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of the 
alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in section 6012, he 
will so notify the State agency. If the Administrator of the Bureau does 
not so conclude, he will submit the matter to the Secretary. If the 
Secretary concludes that the alternative provisions satisfy the criteria 
in section 6012, the State agency will be so notified. If the Secretary 
concludes that there is a question as to whether the alternative 
provisions satisfy the criteria, the State agency will be advised that 
unless the State law provisions are appropriately revised, a notice of 
hearing will be issued as required by the Code of Federal Regulations, 
title 20, section 601.5.

[55 FR 559, Jan. 5, 1990]



    Sec. Appendix C to Part 625--Standard for Fraud and Overpayment 
                                Detection

         Employment Security Manual (Part V, Sections 7510-7515)

         7510-7519 Standard for Fraud and Overpayment Detection

    7510 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    7511 The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the claimant or 
others, and (2) to deter claimants from obtaining benefits through 
willful misrepresentation.
    7513 Criteria for Review of State Conformity With Federal 
Requirements. In determining State conformity with the above 
requirements of the Internal Revenue Code and the Social Security Act, 
as interpreted by the Secretary of Labor, the following criteria will be 
applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explanation: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agency for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are commonly 
made either

[[Page 180]]

by post-audit or by industry surveys. The so-called ``post-audit'' is a 
matching of central office wage-record files against benefit payments 
for the same period. ``Industry surveys'' or ``mass audits'' are done in 
some States by going directly to employers for pay-roll information to 
be checked against concurrent benefit lists. A plan
    A. of investigation based on a sample post-audit will be considered 
as partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated?
    Explanation: To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants?
    Explanation: To meet this criterion, the State agency must issue 
adequate material on claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.
    7515 Evaluation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative methods of administration. If the Bureau concludes that 
the alternative methods satisfy the criteria in section 7513, it will so 
notify the State agency. If the Bureau does not so conclude, it will 
submit to the Secretary the results of the study for his determination 
of whether the State's alternative methods of administration meet the 
criteria.

[55 FR 562, Jan. 5, 1990]

                        PARTS 626	634 [RESERVED]

                        PARTS 636	638 [RESERVED]



PART 639_WORKER ADJUSTMENT AND RETRAINING NOTIFICATION
--Table of Contents



Sec.
639.1 Purpose and scope.
639.2 What does WARN require?
639.3 Definitions.
639.4 Who must give notice?
639.5 When must notice be given?
639.6 Who must receive notice?
639.7 What must the notice contain?
639.8 How is the notice served?
639.9 When may notice be given less than 60 days in advance?
639.10 When may notice be extended?

    Authority: 29 U.S.C. 2107(a).

    Source: 54 FR 16064, Apr. 20, 1989, unless otherwise noted.



Sec.639.1  Purpose and scope.

    (a) Purpose of WARN. The Worker Adjustment and Retraining 
Notification Act (WARN or the Act) provides protection to workers, their 
families and communities by requiring employers to provide notification 
60 calendar days in advance of plant closings and mass layoffs. Advance 
notice provides workers and their families some transition time to 
adjust to the prospective loss of employment, to seek and obtain 
alternative jobs and, if necessary, to enter skill training or 
retraining that will allow these workers to successfully compete in the 
job market. WARN also provides for notice to State dislocated worker 
units so that dislocated worker assistance can be promptly provided.

[[Page 181]]

    (b) Scope of these regulations. These regulations establish basic 
definitions and rules for giving notice, implementing the provisions of 
WARN. The Department's objective is to establish clear principles and 
broad guidelines which can be applied in specific circumstances. 
However, the Department recognizes that Federal rulemaking cannot 
address the multitude of industry and company-specific situations in 
which advance notice will be given.
    (c) Notice encouraged where not required. Section 7 of the Act 
states:

It is the sense of Congress that an employer who is not required to 
comply with the notice requirements of section 3 should, to the extent 
possible, provide notice to its employees about a proposal to close a 
plant or permanently reduce its workforce.

    (d) WARN enforcement. Enforcement of WARN will be through the 
courts, as provided in section 5 of the statute. Employees, their 
representatives and units of local government may initiate civil actions 
against employers believed to be in violation of Sec.3 of the Act. The 
Department of Labor has no legal standing in any enforcement action and, 
therefore, will not be in a position to issue advisory opinions of 
specific cases. The Department will provide assistance in understanding 
these regulations and may revise them from time to time as may be 
necessary.
    (e) Notice in ambiguous situations. It is civically desirable and it 
would appear to be good business practice for an employer to provide 
advance notice to its workers or unions, local government and the State 
when terminating a significant number of employees. In practical terms, 
there are some questions and ambiguities of interpretation inherent in 
the application of WARN to business practices in the market economy that 
cannot be addressed in these regulations. It is therefore prudent for 
employers to weigh the desirability of advance notice against the 
possibility of expensive and time-consuming litigation to resolve 
disputes where notice has not been given. The Department encourages 
employers to give notice in all circumstances.
    (f) Coordination with job placement and retraining programs. The 
Department, through these regulations and through the Trade Adjustment 
Assistance Program (TAA) and Economic Dislocation and Worker Adjustment 
Assistance Act (EDWAA) regulations, encourages maximum coordination of 
the actions and activities of these programs to assure that the negative 
impact of dislocation on workers is lessened to the extent possible. By 
providing for notice to the State dislocated worker unit, WARN notice 
begins the process of assisting workers who will be dislocated.
    (g) WARN not to supersede other laws and contracts. The provisions 
of WARN do not supersede any laws or collective bargaining agreements 
that provide for additional notice or additional rights and remedies. If 
such law or agreement provides for a longer notice period, WARN notice 
shall run concurrently with that additional notice period. Collective 
bargaining agreements may be used to clarify or amplify the terms and 
conditions of WARN, but may not reduce WARN rights.



Sec.639.2  What does WARN require?

    WARN requires employers who are planning a plant closing or a mass 
layoff to give affected employees at least 60 days' notice of such an 
employment action. While the 60-day period is the minimum for advance 
notice, this provision is not intended to discourage employers from 
voluntarily providing longer periods of advance notice. Not all plant 
closings and layoffs are subject to the Act, and certain employment 
thresholds must be reached before the Act applies. WARN sets out 
specific exemptions, and provides for a reduction in the notification 
period in particular circumstances. Damages and civil penalties can be 
assessed against employers who violate the Act.



Sec.639.3  Definitions.

    (a) Employer. (1) The term ``employer'' means any business 
enterprise that employs--
    (i) 100 or more employees, excluding part-time employees; or
    (ii) 100 or more employees, including part-time employees, who in 
the aggregate work at least 4,000 hours per week, exclusive of hours of 
overtime.

[[Page 182]]


Workers on temporary layoff or on leave who have a reasonable 
expectation of recall are counted as employees. An employee has a 
``reasonable expectation of recall'' when he/she understands, through 
notification or through industry practice, that his/her employment with 
the employer has been temporarily interrupted and that he/she will be 
recalled to the same or to a similar job. The term ``employer'' includes 
non-profit organizations of the requisite size. Regular Federal, State, 
local and federally recognized Indian tribal governments are not 
covered. However, the term ``employer'' includes public and quasi-public 
entities which engage in business (i.e., take part in a commercial or 
industrial enterprise, supply a service or good on a mercantile basis, 
or provide independent management of public assets, raising revenue and 
making desired investments), and which are separately organized from the 
regular government, which have their own governing bodies and which have 
independent authority to manage their personnel and assets.
    (2) Under existing legal rules, independent contractors and 
subsidiaries which are wholly or partially owned by a parent company are 
treated as separate employers or as a part of the parent or contracting 
company depending upon the degree of their independence from the parent. 
Some of the factors to be considered in making this determination are 
(i) common ownership, (ii) common directors and/or officers, (iii) de 
facto exercise of control, (iv) unity of personnel policies emanating 
from a common source, and (v) the dependency of operations.
    (3) Workers, other than part-time workers, who are exempt from 
notice under section 4 of WARN are nonetheless counted as employees for 
purposes of determining coverage as an employer.
    (4) An employer may have one or more sites of employment under 
common ownership or control. An example would be a major auto maker 
which has dozens of automobile plants throughout the country. Each plant 
would be considered a site of employment, but there is only one 
``employer'', the auto maker.
    (b) Plant closing. The term ``plant closing'' means the permanent or 
temporary shutdown of a ``single site of employment'', or one or more 
``facilities or operating units'' within a single site of employment, if 
the shutdown results in an ``employment loss'' during any 30-day period 
at the single site of employment for 50 or more employees, excluding any 
part-time employees. An employment action that results in the effective 
cessation of production or the work performed by a unit, even if a few 
employees remain, is a shutdown. A ``temporary shutdown'' triggers the 
notice requirement only if there are a sufficient number of 
terminations, layoffs exceeding 6 months, or reductions in hours of work 
as specified under the definition of ``employment loss.''
    (c) Mass layoff. (1) The term ``mass layoff'' means a reduction in 
force which first, is not the result of a plant closing, and second, 
results in an employment loss at the single site of employment during 
any 30-day period for:
    (i) At least 33 percent of the active employees, excluding part-time 
employees, and
    (ii) At least 50 employees, excluding part-time employees.

Where 500 or more employees (excluding part-time employees) are 
affected, the 33% requirement does not apply, and notice is required if 
the other criteria are met. Plant closings involve employment loss which 
results from the shutdown of one or more distinct units within a single 
site or the entire site. A mass layoff involves employment loss, 
regardless of whether one or more units are shut down at the site.
    (2) Workers, other than part-time workers, who are exempt from 
notice under section 4 of WARN are nonetheless counted as employees for 
purposes of determining coverage as a plant closing or mass layoff. For 
example, if an employer closes a temporary project on which 10 permanent 
and 40 temporary workers are employed, a covered plant closing has 
occurred although only 10 workers are entitled to notice.
    (d) Representative. The term ``representative'' means an exclusive 
representative of employees within the meaning of section 9(a) or 8(f) 
of the

[[Page 183]]

National Labor Relations Act or section 2 of the Railway Labor Act.
    (e) Affected employees. The term ``affected employees'' means 
employees who may reasonably be expected to experience an employment 
loss as a consequence of a proposed plant closing or mass layoff by 
their employer. This includes individually identifiable employees who 
will likely lose their jobs because of bumping rights or other factors, 
to the extent that such individual workers reasonably can be identified 
at the time notice is required to be given. The term ``affected 
employees'' includes managerial and supervisory employees, but does not 
include business partners. Consultant or contract employees who have a 
separate employment relationship with another employer and are paid by 
that other employer, or who are self-employed, are not ``affected 
employees'' of the business to which they are assigned. In addition, for 
purposes of determining whether coverage thresholds are met, either 
incumbent workers in jobs being eliminated or, if known 60 days in 
advance, the actual employees who suffer an employment loss may be 
counted.
    (f) Employment loss. (1) The term ``employment loss'' means (i) an 
employment termination, other than a discharge for cause, voluntary 
departure, or retirement, (ii) a layoff exceeding 6 months, or (iii) a 
reduction in hours of work of individual employees of more than 50% 
during each month of any 6-month period.
    (2) Where a termination or a layoff (see paragraphs (f)(1)(i) and 
(ii) of this section) is involved, an employment loss does not occur 
when an employee is reassigned or transferred to employer-sponsored 
programs, such as retraining or job search activities, as long as the 
reassignment does not constitute a constructive discharge or other 
involuntary termination.
    (3) An employee is not considered to have experienced an employment 
loss if the closing or layoff is the result of the relocation or 
consolidation of part or all of the employer's business and, prior to 
the closing or layoff--
    (i) The employer offers to transfer the employee to a different site 
of employment within a reasonable commuting distance with no more than a 
6-month break in employment, or
    (ii) The employer offers to transfer the employee to any other site 
of employment regardless of distance with no more than a 6-month break 
in employment, and the employee accepts within 30 days of the offer or 
of the closing or layoff, whichever is later.
    (4) A ``relocation or consolidation'' of part or all of an 
employer's business, for purposes of paragraph Sec.639.3(h)(4), means 
that some definable business, whether customer orders, product lines, or 
operations, is transferred to a different site of employment and that 
transfer results in a plant closing or mass layoff.
    (g) Unit of local government. The term ``unit of local government'' 
means any general purpose political subdivision of a State, which has 
the power to levy taxes and spend funds and which also has general 
corporate and police powers. When a covered employment site is located 
in more than one unit of local government, the employer must give notice 
to the unit to which it determines it directly paid the highest taxes 
for the year preceding the year for which the determination is made. All 
local taxes directly paid to the local government should be aggregated 
for this purpose.
    (h) Part-time employee. The term ``part-time'' employee means an 
employee who is employed for an average of fewer than 20 hours per week 
or who has been employed for fewer than 6 of the 12 months preceding the 
date on which notice is required, including workers who work full-time. 
This term may include workers who would traditionally be understood as 
``seasonal'' employees. The period to be used for calculating whether a 
worker has worked ``an average of fewer than 20 hours per week'' is the 
shorter of the actual time the worker has been employed or the most 
recent 90 days.
    (i) Single site of employment. (1) A single site of employment can 
refer to either a single location or a group of contiguous locations. 
Groups of structures which form a campus or industrial park, or separate 
facilities across the street from one another, may be considered a 
single site of employment.

[[Page 184]]

    (2) There may be several single sites of employment within a single 
building, such as an office building, if separate employers conduct 
activities within such a building. For example, an office building 
housing 50 different businesses will contain 50 single sites of 
employment. The offices of each employer will be its single site of 
employment.
    (3) Separate buildings or areas which are not directly connected or 
in immediate proximity may be considered a single site of employment if 
they are in reasonable geographic proximity, used for the same purpose, 
and share the same staff and equipment. An example is an employer who 
manages a number of warehouses in an area but who regularly shifts or 
rotates the same employees from one building to another.
    (4) Non-contiguous sites in the same geographic area which do not 
share the same staff or operational purpose should not be considered a 
single site. For example, assembly plants which are located on opposite 
sides of a town and which are managed by a single employer are separate 
sites if they employ different workers.
    (5) Contiguous buildings owned by the same employer which have 
separate management, produce different products, and have separate 
workforces are considered separate single sites of employment.
    (6) For workers whose primary duties require travel from point to 
point, who are outstationed, or whose primary duties involve work 
outside any of the employer's regular employment sites (e.g., railroad 
workers, bus drivers, salespersons), the single site of employment to 
which they are assigned as their home base, from which their work is 
assigned, or to which they report will be the single site in which they 
are covered for WARN purposes.
    (7) Foreign sites of employment are not covered under WARN. U.S. 
workers at such sites are counted to determine whether an employer is 
covered as an employer under Sec.639.3(a).
    (8) The term ``single site of employment'' may also apply to truly 
unusual organizational situations where the above criteria do not 
reasonably apply. The application of this definition with the intent to 
evade the purpose of the Act to provide notice is not acceptable.
    (j) Facility or operating unit. The term ``facility'' refers to a 
building or buildings. The term ``operating unit'' refers to an 
organizationally or operationally distinct product, operation, or 
specific work function within or across facilities at the single site.
    (k) State dislocated worker unit. The term ``State dislocated worker 
unit'' means a unit designated or created in each State by the Governor 
under title III of the Job Training Partnership Act, as amended by 
EDWAA.
    (l) State. For the purpose of WARN, the term ``State'' includes the 
50 States, the District of Columbia, the Commonwealth of Puerto Rico, 
and the U.S. Virgin Islands.



Sec.639.4  Who must give notice?

    Section 3(a) of WARN states that ``an employer shall not order a 
plant closing or mass layoff until the end of a 60-day period after the 
employer serves written notice of such an order * * *.'' Therefore, an 
employer who is anticipating carrying out a plant closing or mass layoff 
is required to give notice to affected employees or their 
representative(s), the State dislocated worker unit and the chief 
elected official of a unit of local government. (See definitions in 
Sec.639.3 of this part.)
    (a) It is the responsibility of the employer to decide the most 
appropriate person within the employer's organization to prepare and 
deliver the notice to affected employees or their representative(s), the 
State dislocated worker unit and the chief elected official of a unit of 
local government. In most instances, this may be the local site plant 
manager, the local personnel director or a labor relations officer.
    (b) An employer who has previously announced and carried out a 
short-term layoff (6 months or less) which is being extended beyond 6 
months due to business circumstances (including unforeseeable changes in 
price or cost) not reasonably foreseeable at the time of the initial 
layoff is required to give notice when it becomes reasonably foreseeable 
that the extension is required. A layoff extending beyond 6 months from 
the date the layoff commenced for any other reason shall be

[[Page 185]]

treated as an employment loss from the date of its commencement.
    (c) In the case of the sale of part or all of a business, section 
2(b)(1) of WARN defines who the ``employer'' is. The seller is 
responsible for providing notice of any plant closing or mass layoff 
which takes place up to and including the effective date (time) of the 
sale, and the buyer is responsible for providing notice of any plant 
closing or mass layoff that takes place thereafter. Affected employees 
are always entitled to notice; at all times the employer is responsible 
for providing notice.
    (1) If the seller is made aware of any definite plans on the part of 
the buyer to carry out a plant closing or mass layoff within 60 days of 
purchase, the seller may give notice to affected employees as an agent 
of the buyer, if so empowered. If the seller does not give notice, the 
buyer is, nevertheless, responsible to give notice. If the seller gives 
notice as the buyer's agent, the responsibility for notice still remains 
with the buyer.
    (2) It may be prudent for the buyer and seller to determine the 
impacts of the sale on workers, and to arrange between them for advance 
notice to be given to affected employees or their representative(s), if 
a mass layoff or plant closing is planned.



Sec.639.5  When must notice be given?

    (a) General rule. (1) With certain exceptions discussed in 
paragraphs (b), (c) and (d) of this section and in Sec.639.9 of this 
part, notice must be given at least 60 calendar days prior to any 
planned plant closing or mass layoff, as defined in these regulations. 
When all employees are not terminated on the same date, the date of the 
first individual termination within the statutory 30-day or 90-day 
period triggers the 60-day notice requirement. A worker's last day of 
employment is considered the date of that worker's layoff. The first and 
each subsequent group of terminees are entitled to a full 60 days' 
notice. In order for an employer to decide whether issuing notice is 
required, the employer should--
    (i) Look ahead 30 days and behind 30 days to determine whether 
employment actions both taken and planned will, in the aggregate for any 
30-day period, reach the minimum numbers for a plant closing or a mass 
layoff and thus trigger the notice requirement; and
    (ii) Look ahead 90 days and behind 90 days to determine whether 
employment actions both taken and planned each of which separately is 
not of sufficient size to trigger WARN coverage will, in the aggregate 
for any 90-day period, reach the minimum numbers for a plant closing or 
a mass layoff and thus trigger the notice requirement. An employer is 
not, however, required under section 3(d) to give notice if the employer 
demonstrates that the separate employment losses are the result of 
separate and distinct actions and causes, and are not an attempt to 
evade the requirements of WARN.
    (2) The point in time at which the number of employees is to be 
measured for the purpose of determining coverage is the date the first 
notice is required to be given. If this ``snapshot'' of the number of 
employees employed on that date is clearly unrepresentative of the 
ordinary or average employment level, then a more representative number 
can be used to determine coverage. Examples of unrepresentative 
employment levels include cases when the level is near the peak or 
trough of an employment cycle or when large upward or downward shifts in 
the number of employees occur around the time notice is to be given. A 
more representative number may be an average number of employees over a 
recent period of time or the number of employees on an alternative date 
which is more representative of normal employment levels. Alternative 
methods cannot be used to evade the purpose of WARN, and should only be 
used in unusual circumstances.
    (b) Transfers. (1) Notice is not required in certain cases involving 
transfers, as described under the definition of ``employment loss'' at 
Sec.639.3(f) of this part.
    (2) An offer of reassignment to a different site of employment 
should not be deemed to be a ``transfer'' if the new job constitutes a 
constructive discharge.
    (3) The meaning of the term ``reasonable commuting distance'' will 
vary with local and industry conditions. In determining what is a 
``reasonable

[[Page 186]]

commuting distance'', consideration should be given to the following 
factors: geographic accessibility of the place of work, the quality of 
the roads, customarily available transportation, and the usual travel 
time.
    (4) In cases where the transfer is beyond reasonable commuting 
distance, the employer may become liable for failure to give notice if 
an offer to transfer is not accepted within 30 days of the offer or of 
the closing or layoff (whichever is later). Depending upon when the 
offer of transfer was made by the employer, the normal 60-day notice 
period may have expired and the plant closing or mass layoff may have 
occurred. An employer is, therefore, well advised to provide 60-day 
advance notice as part of the transfer offer.
    (c) Temporary employment. (1) No notice is required if the closing 
is of a temporary facility, or if the closing or layoff is the result of 
the completion of a particular project or undertaking, and the affected 
employees were hired with the understanding that their employment was 
limited to the duration of the facility or the project or undertaking.
    (2) Employees must clearly understand at the time of hire that their 
employment is temporary. When such understandings exist will be 
determined by reference to employment contracts, collective bargaining 
agreements, or employment practices of an industry or a locality, but 
the burden of proof will lie with the employer to show that the 
temporary nature of the project or facility was clearly communicated 
should questions arise regarding the temporary employment 
understandings.
    (3) Employers in agriculture and construction frequently hire 
workers for harvesting, processing, or for work on a particular building 
or project. Such work may be seasonal but recurring. Such work falls 
under this exemption if the workers understood at the time they were 
hired that their work was temporary. In uncertain situations, it may be 
prudent for employers to clarify temporary work understandings in 
writing when workers are hired. The same employers may also have 
permanent employees who work on a variety of jobs and tasks continuously 
through most of the calendar year. Such employees are not included under 
this exemption. Giving written notice that a project is temporary will 
not convert permanent employment into temporary work, making jobs exempt 
from WARN.
    (4) Certain jobs may be related to a specific contract or order. 
Whether such jobs are temporary depends on whether the contract or order 
is part of a long-term relationship. For example, an aircraft 
manufacturer hires workers to produce a standard airplane for the U.S. 
fleet under a contract with the U.S. Air Force with the expectation that 
its contract will continue to be renewed during the foreseeable future. 
The employees of this manufacturer would not be considered temporary.
    (d) Strikes or lockouts. The statute provides an exemption for 
strikes and lockouts which are not intended to evade the requirements of 
the Act. A lockout occurs when, for tactical or defensive reasons during 
the course of collective bargaining or during a labor dispute, an 
employer lawfully refuses to utilize some or all of its employees for 
the performance of available work. A lockout not related to collective 
bargaining which is intended as a subterfuge to evade the Act does not 
qualify for this exemption. A plant closing or mass layoff at a site of 
employment where a strike or lockout is taking place, which occurs for 
reasons unrelated to a strike or lockout, is not covered by this 
exemption. An employer need not give notice when permanently replacing a 
person who is deemed to be an economic striker under the National Labor 
Relations Act. Non-striking employees at the same single site of 
employment who experience a covered employment loss as a result of a 
strike are entitled to notice; however, situations in which a strike or 
lockout affects non-striking employees at the same plant may constitute 
an unforeseeable business circumstance, as discussed in Sec.639.9, and 
reduced notice may apply. Similarly, the ``faltering company'' 
exception, also discussed in Sec.639.9 may apply in strike situations. 
Where a union which is on strike represents more than one bargaining 
unit at the single site, non-strikers includes the non-striking 
bargaining unit(s).

[[Page 187]]

Notice also is due to those workers who are not a part of the bargaining 
unit(s) which is involved in the labor negotiations that led to the 
lockout. Employees at other plants which have not been struck, but at 
which covered plant closings or mass layoffs occur as a direct or 
indirect result of a strike or lockout are not covered by the strike/
lockout exemption. The unforeseeable business circumstances exception to 
60 days' notice also may apply to these closings or layoffs at other 
plants.



Sec.639.6  Who must receive notice?

    Section 3(a) of WARN provides for notice to each representative of 
the affected employees as of the time notice is required to be given or, 
if there is no such representative at that time, to each affected 
employee. Notice also must be served on the State dislocated worker unit 
and the chief elected official of the unit of local government within 
which a closing or layoff is to occur. Section 2(b)(1) of the Act states 
that ``any person who is an employee of the seller (other than a 
parttime employee) as of the effective date [time] of the sale shall be 
considered an employee of the purchaser immediately after the effective 
date [time] of the sale.'' This provision preserves the notice rights of 
the employees of a business that has been sold, but creates no other 
employment rights. Although a technical termination of the seller's 
employees may be deemed to have occurred when a sale becomes effective, 
WARN notice is only required where the employees, in fact, experience a 
covered employment loss.
    (a) Representative(s) of affected employees. Written notice is to be 
served upon the chief elected officer of the exclusive representative(s) 
or bargaining agent(s) of affected employees at the time of the notice. 
If this person is not the same as the officer of the local union(s) 
representing affected employees, it is recommended that a copy also be 
given to the local union official(s).
    (b) Affected employees. Notice is required to be given to employees 
who may reasonably be expected to experience an employment loss. This 
includes employees who will likely lose their jobs because of bumping 
rights or other factors, to the extent that such workers can be 
identified at the time notice is required to be given. If, at the time 
notice is required to be given, the employer cannot identify the 
employee who may reasonably be expected to experience an employment loss 
due to the elimination of a particular position, the employer must 
provide notice to the incumbent in that position. While part-time 
employees are not counted in determining whether plant closing or mass 
layoff thresholds are reached, such workers are due notice.
    (c) State dislocated worker unit. Notice is to be served upon the 
State dislocated worker unit. Since the States are restructuring to 
implement training under EDWAA, service of notice upon the State 
Governor constitutes service upon the State dislocated worker unit until 
such time as the Governor makes public State procedures for serving 
notice to this unit.
    (d) Chief elected official of the unit of local government. The 
identity of the chief elected official will vary according to the local 
government structure. In the case of elected boards, the notice is to be 
served upon the board's chairperson.



Sec.639.7  What must the notice contain?

    (a) Notice must be specific. (1) All notice must be specific.
    (2) Where voluntary notice has been given more than 60 days in 
advance, but does not contain all of the required elements set out in 
this section, the employer must ensure that all of the information 
required by this section is provided in writing to the parties listed in 
Sec.639.6 at least 60 days in advance of a covered employment action.
    (3) Notice may be given conditional upon the occurrence or 
nonoccurrence of an event, such as the renewal of a major contract, only 
when the event is definite and the consequences of its occurrence or 
nonoccurrence will necessarily, in the normal course of business, lead 
to a covered plant closing or mass layoff less than 60 days after the 
event. For example, if the non-renewal of a major contract will lead to 
the closing of the plant that produces the articles supplied under the 
contract 30 days after the contract expires, the employer may give 
notice at least 60 days in advance of the projected closing

[[Page 188]]

date which states that if the contract is not renewed, the plant closing 
will occur on the projected date. The notice must contain each of the 
elements set out in this section.
    (4) The information provided in the notice shall be based on the 
best information available to the employer at the time the notice is 
served. It is not the intent of the regulations, that errors in the 
information provided in a notice that occur because events subsequently 
change or that are minor, inadvertent errors are to be the basis for 
finding a violation of WARN.
    (b) As used in this section, the term ``date'' refers to a specific 
date or to a 14-day period during which a separation or separations are 
expected to occur. If separations are planned according to a schedule, 
the schedule should indicate the specific dates on which or the 
beginning date of each 14-day period during which any separations are 
expected to occur. Where a 14-day period is used, notice must be given 
at least 60 days in advance of the first day of the period.
    (c) Notice to each representative of affected employees is to 
contain:
    (1) The name and address of the employment site where the plant 
closing or mass layoff will occur, and the name and telephone number of 
a company official to contact for further information;
    (2) A statement as to whether the planned action is expected to be 
permanent or temporary and, if the entire plant is to be closed, a 
statement to that effect;
    (3) The expected date of the first separation and the anticipated 
schedule for making separations;
    (4) The job titles of positions to be affected and the names of the 
workers currently holding affected jobs.

The notice may include additional information useful to the employees 
such as information on available dislocated worker assistance, and, if 
the planned action is expected to be temporary, the estimated duration, 
if known.
    (d) Notice to each affected employee who does not have a 
representative is to be written in language understandable to the 
employees and is to contain:
    (1) A statement as to whether the planned action is expected to be 
permanent or temporary and, if the entire plant is to be closed, a 
statement to that effect;
    (2) The expected date when the plant closing or mass layoff will 
commence and the expected date when the individual employee will be 
separated;
    (3) An indication whether or not bumping rights exist;
    (4) The name and telephone number of a company official to contact 
for further information.

The notice may include additional information useful to the employees 
such as information on available dislocated worker assistance, and, if 
the planned action is expected to be temporary, the estimated duration, 
if known.
    (e) The notices separately provided to the State dislocated worker 
unit and to the chief elected official of the unit of local government 
are to contain:
    (1) The name and address of the employment site where the plant 
closing or mass layoff will occur, and the name and telephone number of 
a company official to contact for further information;
    (2) A statement as to whether the planned action is expected to be 
permanent or temporary and, if the entire plant is to be closed, a 
statement to that effect;
    (3) The expected date of the first separation, and the anticipated 
schedule for making separations;
    (4) The job titles of positions to be affected, and the number of 
affected employees in each job classification;
    (5) An indication as to whether or not bumping rights exist;
    (6) The name of each union representing affected employees, and the 
name and address of the chief elected officer of each union.

The notice may include additional information useful to the employees 
such as a statement of whether the planned action is expected to be 
temporary and, if so, its expected duration.
    (f) As an alternative to the notices outlined in paragraph (e) 
above, an employer may give notice to the State dislocated worker unit 
and to the unit of local government by providing them with a written 
notice stating the name of address of the employment site

[[Page 189]]

where the plant closing or mass layoff will occur; the name and 
telephone number of a company official to contact for further 
information; the expected date of the first separation; and the number 
of affected employees. The employer is required to maintain the other 
information listed in Sec.639.7(e) on site and readily accessible to 
the State disclocated worker unit and to the unit of general local 
government. Should this information not be available when requested, it 
will be deemed a failure to give required notice.



Sec.639.8  How is the notice served?

    Any reasonable method of delivery to the parties listed under Sec.
639.6 of this part which is designed to ensure receipt of notice of 
least 60 days before separation is acceptable (e.g., first class mail, 
personal delivery with optional signed receipt). In the case of 
notification directly to affected employees, insertion of notice into 
pay envelopes is another viable option. A ticketed notice, i.e., 
preprinted notice regularly included in each employee's pay check or pay 
envelope, does not meet the requirements of WARN.



Sec.639.9  When may notice be given less than 60 days in advance?

    Section 3(b) of WARN sets forth three conditions under which the 
notification period may be reduced to less than 60 days. The employer 
bears the burden of proof that conditions for the exceptions have been 
met. If one of the exceptions is applicable, the employer must give as 
much notice as is practicable to the union, non-represented employees, 
the State dislocated worker unit, and the unit of local government and 
this may, in some circumstances, be notice after the fact. The employer 
must, at the time notice actually is given, provide a brief statement of 
the reason for reducing the notice period, in addition to the other 
elements set out in Sec.639.7.
    (a) The exception under section 3(b)(1) of WARN, termed ``faltering 
company'', applies to plant closings but not to mass layoffs and should 
be narrowly construed. To qualify for reduced notice under this 
exception:
    (1) An employer must have been actively seeking capital or business 
at the time that 60-day notice would have been required. That is, the 
employer must have been seeking financing or refinancing through the 
arrangement of loans, the issuance of stocks, bonds, or other methods of 
internally generated financing; or the employer must have been seeking 
additional money, credit, or business through any other commercially 
reasonable method. The employer must be able to identify specific 
actions taken to obtain capital or business.
    (2) There must have been a realistic opportunity to obtain the 
financing or business sought.
    (3) The financing or business sought must have been sufficient, if 
obtained, to have enabled the employer to avoid or postpone the 
shutdown. The employer must be able to objectively demonstrate that the 
amount of capital or the volume of new business sought would have 
enabled the employer to keep the facility, operating unit, or site open 
for a reasonable period of time.
    (4) The employer reasonably and in good faith must have believed 
that giving the required notice would have precluded the employer from 
obtaining the needed capital or business. The employer must be able to 
objectively demonstrate that it reasonably thought that a potential 
customer or source of financing would have been unwilling to provide the 
new business or capital if notice were given, that is, if the employees, 
customers, or the public were aware that the facility, operating unit, 
or site might have to close. This condition may be satisfied if the 
employer can show that the financing or business source would not choose 
to do business with a troubled company or with a company whose workforce 
would be looking for other jobs. The actions of an employer relying on 
the ``faltering company'' exception will be viewed in a company-wide 
context. Thus, a company with access to capital markets or with cash 
reserves may not avail itself of this exception by looking solely at the 
financial condition of the facility, operating unit, or site to be 
closed.
    (b) The ``unforeseeable business circumstances'' exception under 
section 3(b)(2)(A) of WARN applies to plant closings and mass layoffs 
caused by

[[Page 190]]

business circumstances that were not reasonably foreseeable at the time 
that 60-day notice would have been required.
    (1) An important indicator of a business circumstance that is not 
reasonably foreseeable is that the circumstance is caused by some 
sudden, dramatic, and unexpected action or condition outside the 
employer's control. A principal client's sudden and unexpected 
termination of a major contract with the employer, a strike at a major 
supplier of the employer, and an unanticipated and dramatic major 
economic downturn might each be considered a business circumstance that 
is not reasonably foreseeable. A government ordered closing of an 
employment site that occurs without prior notice also may be an 
unforeseeable business circumstance.
    (2) The test for determining when business circumstances are not 
reasonably foreseeable focuses on an employer's business judgment. The 
employer must exercise such commercially reasonable business judgment as 
would a similarly situated employer in predicting the demands of its 
particular market. The employer is not required, however, to accurately 
predict general economic conditions that also may affect demand for its 
products or services.
    (c) The ``natural disaster'' exception in section 3(b)(2)(B) of WARN 
applies to plant closings and mass layoffs due to any form of a natural 
disaster.
    (1) Floods, earthquakes, droughts, storms, tidal waves or tsunamis 
and similar effects of nature are natural disasters under this 
provision.
    (2) To qualify for this exception, an employer must be able to 
demonstrate that its plant closing or mass layoff is a direct result of 
a natural disaster.
    (3) While a disaster may preclude full or any advance notice, such 
notice as is practicable, containing as much of the information required 
in Sec.639.7 as is available in the circumstances of the disaster 
still must be given, whether in advance or after the fact of an 
employment loss caused by a natural disaster.
    (4) Where a plant closing or mass layoff occurs as an indirect 
result of a natural disaster, the exception does not apply but the 
``unforeseeable business circumstance'' exception described in paragraph 
(b) of this section may be applicable.



Sec.639.10  When may notice be extended?

    Additional notice is required when the date or schedule of dates of 
a planned plant closing or mass layoff is extended beyond the date or 
the ending date of any 14-day period announced in the original notice as 
follows:
    (a) If the postponement is for less than 60 days, the additional 
notice should be given as soon as possible to the parties identified in 
Sec.639.6 and should include reference to the earlier notice, the date 
(or 14-day period) to which the planned action is postponed, and the 
reasons for the postponement. The notice should be given in a manner 
which will provide the information to all affected employees.
    (b) If the postponement is for 60 days or more, the additional 
notice should be treated as new notice subject to the provisions of 
Sec. Sec.639.5, 639.6 and 639.7 of this part. Rolling notice, in the 
sense of routine periodic notice, given whether or not a plant closing 
or mass layoff is impending, and with the intent to evade the purpose of 
the Act rather than give specific notice as required by WARN, is not 
acceptable.



PART 640_STANDARD FOR BENEFIT PAYMENT PROMPTNESS_UNEMPLOYMENT COMPENSATION
--Table of Contents



Sec.
640.1 Purpose and scope.
640.2 Federal law requirements.
640.3 Interpretation of Federal law requirements.
640.4 Standard for conformity.
640.5 Criteria for compliance.
640.6 Review of State compliance.
640.7 Benefit payment performance plans.
640.8 Enforcement of the standard.
640.9 Information, reports and studies.

    Authority: Sec. 1102, Social Security Act (42 U.S.C. 1302); 
Secretary's order No. 4-75, dated April 16, 1975 (40 FR 18515) (5 U.S.C. 
553). Interpret and apply secs. 303(a)(1) and 303(b)(2) of the Social 
Security Act (42 U.S.C. 503(a)(1), 503(b)(2)).

    Source: 43 FR 33225, July 28, 1978, unless otherwise noted.



Sec.640.1  Purpose and scope.

    (a) Purpose. (1) Section 303(a)(1) of the Social Security Act 
requires, for the

[[Page 191]]

purposes of title III of that Act, that a State unemployment 
compensation law include provision for methods of administration of the 
law that are reasonably calculated to insure the full payment of 
unemployment compensation when determined under the State law to be due 
to claimants. The standard in this part is issued to implement section 
303(a)(1) in regard to promptness in the payment of unemployment 
benefits to eligible claimants.
    (2) Although the standard applies to the promptness of all benefit 
payments and the criteria apply directly to the promptness of first 
benefit payments, it is recognized that adequate performance is 
contingent upon the prompt determination of eligibility by the State as 
a condition for the payment or denial of benefits. Accordingly, implicit 
in prompt performance with respect to benefit payments is the 
corresponding need for promptness by the State in making determinations 
of eligibility. However, applicable Federal laws provide no authority 
for the Secretary of Labor to determine the eligibility of individuals 
under a State law.
    (b) Scope. (1) The standard in this part applies to all State laws 
approved by the Secretary of Labor under the Federal Unemployment Tax 
Act (section 3304 of the Internal Revenue Code of 1986, 26 U.S.C. 3304), 
and to the administration of the State laws.
    (2) The standard specified in Sec.640.4 applies to all claims for 
unemployment compensation. The criteria for State compliance in Sec.
640.5 apply to first payments of unemployment compensation under the 
State law to eligible claimants following the filing of initial claims 
and first compensable claims.

[43 FR 33225, July 28, 1978, as amended at 71 FR 35516, June 21, 2006]



Sec.640.2  Federal law requirements.

    (a) Conformity. Section 303(a)(1) of the Social Security Act, 42 
U.S.C. 503(a)(1), requires that a State law include provision for:

    Such methods of administration * * * as are found by the Secretary 
of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.

    (b) Compliance. Section 303(b)(2) of the Social Security Act, 42 
U.S.C. 503(b)(2), provides in part that:

    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 in the administration of the 
law there is:
    (1) * * *
    (2) a failure to comply substantially with any provision specified 
in subsection (a) of this section;

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 to comply.

    Until he is so satisfied, he shall make no further certification to 
the Secretary of the Treasury with respect to such State * * *.



Sec.640.3  Interpretation of Federal law requirements.

    (a) Section 303(a)(1). The Secretary interprets section 303(a)(1) of 
the Social Security Act to require that a State law include provision 
for such methods of administration as will reasonable insure the full 
payment of unemployment benefits to eligible claimants with the greatest 
promptness that is administratively feasible.
    (b) Section 303(b)(2). (1) The Secretary interprets section 
303(b)(2) of the Social Security Act to require that, in the 
administration of a State law, there shall be substantial compliance 
with the provision required by section 303(a)(1).
    (2) The greatest promptness that is administratively feasible will 
depend upon the circumstances in each State that impacts upon its 
performance in paying benefits. Factors reasonably beyond a State's 
control may cause its performance to drop below the level of adequacy 
expressed in the table below as criteria for substantial compliance 
applicable to all States. Where it is demonstrated that failure to meet 
the criteria of adequacy is attributable to factors reasonably beyond 
the State's control and, in light of those factors, the State has 
performed at the highest level administratively feasible, it will be 
considered that the State is in substantial compliance with the Standard 
for conformity. Whether or not the State is in substantial compliance, 
the remedial provisions of Sec. Sec.640.7 and 640.8

[[Page 192]]

will be applicable when the pertinent criteria are not met.



Sec.640.4  Standard for conformity.

    A State law will satisfy the requirement of section 303(a)(1), if it 
contains a provision requiring, or which is construed to require, such 
methods of administration as will reasonably insure the full payment of 
unemployment benefits to eligible claimants with the greatest promptness 
that is administratively feasible.



Sec.640.5  Criteria for compliance.

    The criteria in the schedule below shall apply in determining 
whether, in the administration of a State law, there has been 
substantial compliance with the provision required by section 303(a)(1) 
in the issuance of benefit payments to eligible claimants for the first 
compensable weeks of unemployment in their benefit years:

------------------------------------------------------------------------
                                           Percentage of first payments
                                           issued--days following end of
                                              first compensable week
                                         -------------------------------
                                          14 days,   21 days,
                                           waiting  nonwaiting  35 days,
                                            week       week        all
                                           States   States \1\   States
------------------------------------------------------------------------
                            Intrastate Claims
------------------------------------------------------------------------
Performance to be achieved for the 12-          87         87         93
 mo. period ending on March 31 of each
 year...................................
------------------------------------------------------------------------
                            Interstate Claims
------------------------------------------------------------------------
Performance to be achieved for the 12-          70         70        78
 mo. period ending on March 31 of each
 year...................................
------------------------------------------------------------------------
\1\ A nonwaiting week State is any State whose law does not require that
  a non-compensable period of unemployment be served before the payment
  of benefits commences.


A State will be deemed to comply substantially, as set out in Sec. Sec.
640.2(b) and 640.3(b), if its average performance, for the period of 
review, meets or exceeds the applicable criteria set forth above.

[43 FR 33225, July 28, 1978, as amended at 71 FR 35516, June 21, 2006]



Sec.640.6  Review of State compliance.

    (a) Annual reviews. The administration of each State law shall be 
reviewed annually for compliance, as set out in Sec. Sec.640.2(b) and 
640.3(b). Annual reviews shall be for the 12-month period ending on 
March 31 of each year. An annual review with respect to any State shall 
be based upon the monthly reports of performance submitted to the 
Department by the State agency, any special reports of performance 
submitted to the Department by the State agency, any benefit payment 
performance plan applicable to the period being reviewed, any study or 
anylysis of performance relevant to the period being reviewed, and any 
other audit, study, or analysis as directed by the Department of Labor.
    (b) Periodic review. The administration of any State law may be 
reviewed at any other time, when there is reason to believe that there 
may be failure of compliance as set out in Sec. Sec.640.2(b) and 
640.3(b). Such a review shall be based upon the same elements as may be 
required for an annual review.



Sec.640.7  Benefit payment performance plans.

    (a) Annual plan. An annual benefit payment performance plan shall be 
submitted by a State agency to the Department of Labor when average 
performance over a 12-month period ending on March 31 of any year does 
not meet the criteria specified in Sec.640.5. An annual plan shall be 
submitted by July 31 following the applicable March 31, and shall be a 
plan for the fiscal year that begins on the succeeding October 1. An 
annual plan shall be subject to continuing appraisal during the period 
it is in effect, and shall be subject to modification from time to time 
as may be directed by the Department of Labor after consultation with 
the State agency.
    (b) Periodic plan. A periodic benefit payment performance plan shall 
be submitted by a State agency when directed by the Department of Labor. 
A periodic plan may be in addition to, or a modification of an annual 
plan and may be required even though an annual plan covering the same 
period is not required. A periodic plan shall be subject to continuing 
appraisal during the period it is in effect, and shall be subject to 
modification from time to time as may be directed by the Department of 
Labor.

[[Page 193]]

    (c) Content of plan. An annual plan or periodic plan shall set forth 
such corrective actions, performance and evaluation plans, and other 
matters as the Department of Labor directs, after consultation with the 
State agency.

(Approved by the Office of Management and Budget under control number 
1205-0132)

(Pub. L. No. 96-511)

[43 FR 33225, July 28, 1978, as amended at 49 FR 18295, Apr. 30, 1984]



Sec.640.8  Enforcement of the standard.

    (a) Action by the Department of Labor. When a State agency fails, 
for an extended period, to meet the standard set forth in Sec.640.4 or 
the criteria specified in Sec.640.5, or fails to show satisfactory 
improvement after having submitted a benefit payment performance plan of 
action, the Department of Labor shall pursue any of the following 
remedial steps that it deems necessary before considering application of 
the provisions of Sec.640.2:
    (1) Initiate informal discussion with State agency officials 
pursuant to Sec.601.5(b) of this chapter.
    (2) Conduct an evaluation of the State's benefit payment processes 
and analyze the reasons for the State's failure to meet the standard.
    (3) Recommend specific actions for the State to take to improve its 
benefit payment performance.
    (4) Request the State to submit a plan for complying with the 
standard by a prescribed date.
    (5) Initiate special reporting requirements for a specified period 
of time.
    (6) Consult with the Governor of the State regarding the 
consequences of the State's noncompliance with the standard.
    (7) Propose to the Governor of the State and on an agreed upon basis 
arrange for the use of expert Federal staff to furnish technical 
assistance to the State agency with respect to its payment operations.
    (b) Action by the Assistant Secretary. If, after all remedial steps 
have been exhausted, a State fails to take appropriate action, or 
otherwise fails to meet the standard specified in Sec.640.4, the 
Assistant Secretary for Employment and Training shall, after taking all 
factors into consideration, recommend to the Secretary of Labor that 
appropriate notice be sent to the State agency and that an opportunity 
for a hearing be extended in accordance with section 303(b) of the 
Social Security Act.



Sec.640.9  Information, reports and studies.

    A State shall furnish to the Secretary of Labor such information and 
reports and make such studies as the Secretary decides are necessary or 
appropriate to carry out this part.



PART 641_PROVISIONS GOVERNING THE SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM
--Table of Contents



                    Subpart A_Purpose and Definitions

Sec.
641.100 What does this part cover?
641.110 What is the SCSEP?
641.120 What are the purposes of the SCSEP?
641.130 What is the scope of this part?
641.140 What definitions apply to this part?

        Subpart B_Coordination With the Workforce Investment Act

641.200 What is the relationship between the SCSEP and the Workforce 
          Investment Act?
641.210 What services, in addition to the applicable core services, must 
          SCSEP grantees and sub-recipients provide through the One-Stop 
          delivery system?
641.220 Does title I of WIA require the SCSEP to use OAA funds for 
          individuals who are not eligible for SCSEP services or for 
          services that are not authorized under the OAA?
641.230 Must the individual assessment conducted by the SCSEP grantee or 
          sub-recipient and the assessment performed by the One-Stop 
          delivery system be accepted for use by either entity to 
          determine the individual's need for services in the SCSEP and 
          adult programs under title I-B of WIA?
641.240 Are SCSEP participants eligible for intensive and training 
          services under title I of WIA?

                        Subpart C_The State Plan

641.300 What is the State Plan?
641.302 What is a four-year strategy?
641.305 Who is responsible for developing and submitting the State Plan?

[[Page 194]]

641.310 May the Governor, or the highest government official, delegate 
          responsibility for developing and submitting the State Plan?
641.315 Who participates in developing the State Plan?
641.320 Must all national grantees operating within a State participate 
          in the State planning process?
641.325 What information must be provided in the State Plan?
641.330 How should the State Plan reflect community service needs?
641.335 How should the Governor, or the highest government official, 
          address the coordination of SCSEP services with activities 
          funded under title I of WIA?
641.340 How often must the Governor, or the highest government official, 
          update the State Plan?
641.345 What are the requirements for modifying the State Plan?
641.350 How should public comments be solicited and collected?
641.355 Who may comment on the State Plan?
641.360 How does the State Plan relate to the equitable distribution 
          report?
641.365 How must the equitable distribution provisions be reconciled 
          with the provision that disruptions to current participants 
          should be avoided?

 Subpart D_Grant Application and Responsibility Review Requirements for 
                     State and National SCSEP Grants

641.400 What entities are eligible to apply to the Department for funds 
          to administer SCSEP projects?
641.410 How does an eligible entity apply?
641.420 What are the eligibility criteria that each applicant must meet?
641.430 What are the responsibility conditions that an applicant must 
          meet?
641.440 Are there responsibility conditions that alone will disqualify 
          an applicant?
641.450 How will the Department examine the responsibility of eligible 
          entities?
641.460 What factors will the Department consider in selecting national 
          grantees?
641.465 Under what circumstances may the Department reject an 
          application?
641.470 What happens if an applicant's application is rejected?
641.480 May the Governor, or the highest government official, make 
          recommendations to the Department on national grant 
          applications?
641.490 When will the Department compete SCSEP grant awards?
641.495 When must a State compete its SCSEP award?

                   Subpart E_Services to Participants

641.500 Who is eligible to participate in the SCSEP?
641.505 When is eligibility determined?
641.507 How is applicant income computed?
641.510 What types of income are included and excluded for participant 
          eligibility determinations?
641.512 May grantees and sub-recipients enroll otherwise eligible job 
          ready individuals and place them directly into unsubsidized 
          employment?
641.515 How must grantees and sub-recipients recruit and select eligible 
          individuals for participation in the SCSEP?
641.520 Are there any priorities that grantees and sub-recipients must 
          use in selecting eligible individuals for participation in the 
          SCSEP?
641.535 What services must grantees and sub-recipients provide to 
          participants?
641.540 What types of training may grantees and sub-recipients provide 
          to SCSEP participants in addition to the training received at 
          the community service assignment?
641.545 What supportive services may grantees and sub-recipients provide 
          to participants?
641.550 What responsibility do grantees and sub-recipients have to place 
          participants in unsubsidized employment?
641.565 What policies govern the provision of wages and benefits to 
          participants?
641.570 Is there a time limit for participation in the program?
641.575 May a grantee or sub-recipient establish a limit on the amount 
          of time its participants may spend at a host agency?
641.577 Is there a limit on community service assignment hours?
641.580 Under what circumstances may a grantee or sub-recipient 
          terminate a participant?
641.585 What is the employment status of SCSEP participants?

         Subpart F_Pilot, Demonstration, and Evaluation Projects

641.600 What is the purpose of the pilot, demonstration, and evaluation 
          projects authorized under Sec.502(e) of the OAA?
641.610 How are pilot, demonstration, and evaluation projects 
          administered?
641.620 How may an organization apply for pilot, demonstration, and 
          evaluation project funding?
641.630 What pilot, demonstration, and evaluation project activities are 
          allowable under Sec.502(e)?
641.640 Should pilot, demonstration, and evaluation project entities 
          coordinate with SCSEP grantees and sub-recipients, including 
          area agencies on aging?

[[Page 195]]

                  Subpart G_Performance Accountability

641.700 What performance measures/indicators apply to SCSEP grantees?
641.710 How are the performance indicators defined?
641.720 How will the Department and grantees initially determine and 
          then adjust expected levels of performance for the core 
          performance measures?
641.730 How will the Department assist grantees in the transition to the 
          new core performance indicators?
641.740 How will the Department determine whether a grantee fails, 
          meets, or exceeds the expected levels of performance for the 
          core indicators and what will be the consequences of failing 
          to meet expected levels of performance?
641.750 Will there be performance-related incentives?

                  Subpart H_Administrative Requirements

641.800 What uniform administrative requirements apply to the use of 
          SCSEP funds?
641.803 What is program income?
641.806 How must SCSEP program income be used?
641.809 What non-Federal share (matching) requirements apply to the use 
          of SCSEP funds?
641.812 What is the period of availability of SCSEP funds?
641.815 May the period of availability be extended?
641.821 What audit requirements apply to the use of SCSEP funds?
641.824 What lobbying requirements apply to the use of SCSEP funds?
641.827 What general nondiscrimination requirements apply to the use of 
          SCSEP funds?
641.833 What policies govern political patronage?
641.836 What policies govern political activities?
641.839 What policies govern union organizing activities?
641.841 What policies govern nepotism?
641.844 What maintenance of effort requirements apply to the use of 
          SCSEP funds?
641.847 What uniform allowable cost requirements apply to the use of 
          SCSEP funds?
641.850 Are there other specific allowable and unallowable cost 
          requirements for the SCSEP?
641.853 How are costs classified?
641.856 What functions and activities constitute administrative costs?
641.859 What other special rules govern the classification of costs as 
          administrative costs or programmatic activity costs?
641.861 Must SCSEP recipients provide funding for the administrative 
          costs of sub-recipients?
641.864 What functions and activities constitute programmatic activity 
          costs?
641.867 What are the limitations on the amount of SCSEP administrative 
          costs?
641.870 Under what circumstances may the administrative cost limitation 
          be increased?
641.873 What minimum expenditure levels are required for participant 
          wages and benefits?
641.874 What conditions apply to a SCSEP grantee request to use 
          additional funds for training and supportive service costs?
641.876 How will compliance with cost limitations and minimum 
          expenditure levels be determined?
641.879 What are the financial and performance reporting requirements 
          for recipients?
641.881 What are the SCSEP recipient's responsibilities relating to 
          awards to sub-recipients?
641.884 What are the grant closeout procedures?

           Subpart I_Grievance Procedures and Appeals Process

641.900 What appeal process is available to an applicant that does not 
          receive a grant?
641.910 What grievance procedures must grantees make available to 
          applicants, employees, and participants?
641.920 What actions of the Department may a grantee appeal and what 
          procedures apply to those appeals?
641.930 Is there an alternative dispute resolution process that may be 
          used in place of an OALJ hearing?

    Authority: 42 U.S.C. 3056 et seq.; Pub. L. 109-365.

    Source: 75 FR 53812, Sept. 1, 2010, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec.641.100  What does this part cover?

    Part 641 contains the Department of Labor's regulations for the 
Senior Community Service Employment Program (SCSEP), authorized under 
title V of the Older Americans Act (OAA), 42 U.S.C. 3056 et seq., as 
amended by the Older Americans Act Amendments of 2006, Public Law 109-
365. This part and other pertinent regulations set forth the regulations 
applicable to the SCSEP.

[[Page 196]]

    (a) Subpart A of this part contains introductory provisions and 
definitions that apply to this part.
    (b) Subpart B of this part describes the required relationship 
between the OAA and the Workforce Investment Act of 1998 (WIA), 29 
U.S.C. 2801 et seq. These provisions discuss the coordinated efforts to 
provide services through the integration of the SCSEP within the One-
Stop delivery system.
    (c) Subpart C of this part sets forth the requirements for the State 
Plan, such as the four-year strategy, required coordination efforts, 
public comments, and equitable distribution.
    (d) Subpart D of this part establishes grant planning and 
application requirements, including grantee eligibility and 
responsibility review provisions that apply to the Department's award of 
SCSEP funds for State and national grants.
    (e) Subpart E of this part details SCSEP participant services.
    (f) Subpart F of this part provides the rules for pilot, 
demonstration, and evaluation projects.
    (g) Subpart G of this part outlines the performance accountability 
requirements. This subpart establishes requirements for performance 
measures, defines such measures, and establishes corrective actions for 
failure to meet core performance measures.
    (h) Subpart H of this part sets forth the administrative 
requirements for SCSEP funds.
    (i) Subpart I of this part describes the grievance and appeals 
processes and requirements.



Sec.641.110  What is the SCSEP?

    The Senior Community Service Employment Program (SCSEP) is a program 
administered by the Department of Labor that serves unemployed low-
income persons who are 55 years of age and older and who have poor 
employment prospects by training them in part-time community service 
assignments and by assisting them in developing skills and experience to 
facilitate their transition to unsubsidized employment.



Sec.641.120  What are the purposes of the SCSEP?

    The purposes of the SCSEP are to foster individual economic self-
sufficiency and promote useful part-time opportunities in community 
service assignments for unemployed low-income persons who are 55 years 
of age or older, particularly persons who have poor employment 
prospects, and to increase the number of older persons who may enjoy the 
benefits of unsubsidized employment in both the public and private 
sectors. (OAA Sec.502(a)(1)).



Sec.641.130  What is the scope of this part?

    The regulations in this part address the requirements that apply to 
the SCSEP. More detailed policies and procedures are contained in 
administrative guidelines issued by the Department. Throughout this 
part, phrases such as, ``according to instructions (procedures) issued 
by the Department'' or ``additional guidance will be provided through 
administrative issuance'' refer to the documents issued under the 
Secretary's authority to administer the SCSEP, such as Training and 
Employment Guidance Letters (TEGLs), Training and Employment Notices 
(TENs), previously issued SCSEP Older Worker Bulletins that are still in 
effect, technical assistance guides, and other SCSEP guidance.



Sec.641.140  What definitions apply to this part?

    The following definitions apply to this part:
    Additional indicators mean retention in unsubsidized employment for 
1 year; satisfaction of participants, employers and their host agencies 
with their experiences and the services provided; entry into volunteer 
work; and any other indicators of performance that the Secretary 
determines to be appropriate to evaluate services and performance. (OAA 
Sec.513(b)(2)).
    At risk for homelessness means an individual is likely to become 
homeless and the individual lacks the resources and support networks 
needed to obtain housing.

[[Page 197]]

    Authorized position level means the number of SCSEP enrollment 
opportunities that can be supported for a 12-month period based on the 
average national unit cost. The authorized position level is derived by 
dividing the total amount of funds appropriated for a Program Year by 
the national average unit cost per participant for that Program Year as 
determined by the Department. The national average unit cost includes 
all costs of administration, other participant costs, and participant 
wage and benefit costs as defined in Sec.506(g) of the OAA.
    Co-enrollment applies to any individual who meets the qualifications 
for SCSEP participation and is also enrolled as a participant in WIA or 
another employment and training program, as provided in the Individual 
Employment Plan.
    Community service means:
    (1) Social, health, welfare, and educational services (including 
literacy tutoring), legal and other counseling services and assistance, 
including tax counseling and assistance and financial counseling, and 
library, recreational, and other similar services;
    (2) Conservation, maintenance, or restoration of natural resources;
    (3) Community betterment or beautification;
    (4) Antipollution and environmental quality efforts;
    (5) Weatherization activities;
    (6) Economic development; and
    (7) Other such services essential and necessary to the community as 
the Secretary determines by rule to be appropriate. (OAA Sec.
518(a)(1)).
    Community service assignment means part-time, temporary employment 
paid with grant funds in projects at host agencies through which 
eligible individuals are engaged in community service and receive work 
experience and job skills that can lead to unsubsidized employment. (OAA 
Sec.518(a)(2)).
    Core indicators means hours (in the aggregate) of community service 
employment; entry into unsubsidized employment; retention in 
unsubsidized employment for six months; earnings; the number of eligible 
individuals served; and most-in-need (the number of individuals 
described in Sec.518 (a)(3)(B)(ii) or (b)(2) of the OAA). (OAA Sec.
513(b)(1)).
    Core services means those services described in Sec.134(d)(2) of 
WIA.
    Department or DOL means the United States Department of Labor, 
including its agencies and organizational units.
    Disability means a disability attributable to a mental or physical 
impairment, or a combination of mental and physical impairments, that 
results in substantial functional limitations in one or more of the 
following areas of major life activity:
    (1) Self-care;
    (2) Receptive and expressive language;
    (3) Learning;
    (4) Mobility;
    (5) Self-direction;
    (6) Capacity for independent living;
    (7) Economic self-sufficiency;
    (8) Cognitive functioning; and
    (9) Emotional adjustment. (42 U.S.C. 3002(13)).
    Equitable distribution report means a report based on the latest 
available Census or other reliable data, which lists the optimum number 
of participant positions in each designated area in the State, and the 
number of authorized participant positions each grantee serves in that 
area, taking into account the needs of underserved counties and 
incorporated cities as necessary. This report provides a basis for 
improving the distribution of SCSEP positions.
    Frail means an individual 55 years of age or older who is determined 
to be functionally impaired because the individual--
    (1)(i) Is unable to perform at least two activities of daily living 
without substantial human assistance, including verbal reminding, 
physical cueing, or supervision; or
    (ii) At the option of the State, is unable to perform at least three 
such activities without such assistance; or
    (2) Due to a cognitive or other mental impairment, requires 
substantial supervision because the individual behaves in a manner that 
poses a serious health or safety hazard to the individual or to another 
individual. (42 U.S.C. 3002(22)).
    Grant period means the time period between the effective date of the 
grant

[[Page 198]]

award and the ending date of the award, which includes any modifications 
extending the period of performance, whether by the Department's 
exercise of options contained in the grant agreement or otherwise. This 
is also referred to as ``project period'' or ``award period.''
    Grantee means an entity receiving financial assistance directly from 
the Department to carry out SCSEP activities. The grantee is the legal 
entity that receives the award and is legally responsible for carrying 
out the SCSEP, even if only a particular component of the entity is 
designated in the grant award document. Grantees include public and 
nonprofit private agencies and organizations, agencies of a State, 
tribal organizations, and Territories, that receive SCSEP grants from 
the Department. (OAA Sec. Sec.502(b)(1), 506(a)(2)). As used here, 
``grantee'' includes ``grantee'' as defined in 29 CFR 97.3 and 
``recipient'' as defined in 29 CFR 95.2(gg).
    Greatest economic need means the need resulting from an income level 
at or below the poverty guidelines established by the Department of 
Health and Human Services and approved by the Office of Management and 
Budget (OMB). (42 U.S.C. 3002(23)).
    Greatest social need means the need caused by non-economic factors, 
which include: Physical and mental disabilities; language barriers; and 
cultural, social, or geographical isolation, including isolation caused 
by racial or ethnic status, which restricts the ability of an individual 
to perform normal daily tasks or threatens the capacity of the 
individual to live independently. (42 U.S.C. 3002(24)).
    Homeless includes:
    (1) An individual who lacks a fixed, regular, and adequate nighttime 
residence; and
    (2) An individual who has a primary nighttime residence that is:
    (i) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters, and transitional housing for the mentally ill);
    (ii) An institution that provides a temporary residence for 
individuals intended to be institutionalized; or
    (iii) A public or private place not designed for, or ordinarily used 
as, regular sleeping accommodations for human beings. (42 U.S.C. 
11302(a)).
    Host agency means a public agency or a private nonprofit 
organization exempt from taxation under Sec.501(c)(3) of the Internal 
Revenue Code of 1986 which provides a training work site and supervision 
for one or more participants. Political parties cannot be host agencies. 
A host agency may be a religious organization as long as the projects in 
which participants are being trained do not involve the construction, 
operation, or maintenance of any facility used or to be used as a place 
for sectarian religious instruction or worship. (OAA Sec.
502(b)(1)(D)).
    Indian means a person who is a member of an Indian tribe. (42 U.S.C. 
3002(26)).
    Indian tribe means any tribe, band, nation, or other organized group 
or community of Indians (including Alaska Native village or regional or 
village corporation as defined in or established pursuant to the Alaska 
Native Claims Settlement Act, 43 U.S.C. 1601 et seq.) which: (1) Is 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians; or (2) 
is located on, or in proximity to, a Federal or State reservation or 
Rancheria. (42 U.S.C. 3002(27)).
    Individual employment plan (IEP) means a plan for a participant that 
is based on an assessment of that participant conducted by the grantee 
or sub-recipient, or a recent assessment or plan developed by another 
employment and training program, and a related service strategy. The IEP 
must include an appropriate employment goal (except that after the first 
IEP, subsequent IEPs need not contain an employment goal if such a goal 
is not feasible), objectives that lead to the goal, a timeline for the 
achievement of the objectives; and be jointly agreed upon with the 
participant. (OAA Sec.502(b)(1)(N)).
    Intensive services means those services authorized by Sec.
134(d)(3) of the Workforce Investment Act.
    Jobs for Veterans Act means Public Law 107-288 (2002). Section 2(a) 
of the Jobs for Veterans Act, codified at 38

[[Page 199]]

U.S.C. 4215(a), provides a priority of service for Department of Labor 
employment and training programs for veterans, and certain spouses of 
veterans, who otherwise meet the eligibility requirements for 
participation. Priority is extended to veterans. Priority is also 
extended to the spouse of a veteran who died of a service-connected 
disability; the spouse of a member of the Armed Forces on active duty 
who has been listed for a total of more than 90 days as missing in 
action, captured in the line of duty by a hostile force, or forcibly 
detained by a foreign government or power; the spouse of any veteran who 
has a total disability resulting from a service-connected disability; 
and the spouse of any veteran who died while a disability so evaluated 
was in existence. (See Sec.641.520(b)).
    Job ready refers to individuals who do not require further education 
or training to perform work that is available in their labor market.
    Limited English proficiency means individuals who do not speak 
English as their primary language and who have a limited ability to 
read, speak, write, or understand English.
    Local Board means a Local Workforce Investment Board established 
under Sec.117 of the Workforce Investment Act.
    Local Workforce Investment Area or local area means an area 
designated by the Governor of a State under Sec.116 of the Workforce 
Investment Act.
    Low employment prospects means the likelihood that an individual 
will not obtain employment without the assistance of the SCSEP or 
another workforce development program. Persons with low employment 
prospects have a significant barrier to employment. Significant barriers 
to employment may include but are not limited to: Lacking a substantial 
employment history, basic skills, and/or English-language proficiency; 
lacking a high school diploma or the equivalent; having a disability; 
being homeless; or residing in socially and economically isolated rural 
or urban areas where employment opportunities are limited.
    Low literacy skills means the individual computes or solves 
problems, reads, writes, or speaks at or below the 8th grade level or is 
unable to compute or solve problems, read, write, or speak at a level 
necessary to function on the job, in the individual's family, or in 
society.
    Most-in-need means participants with one or more of the following 
characteristics: Have a severe disability; are frail; are age 75 or 
older; are age-eligible but not receiving benefits under title II of the 
Social Security Act; reside in an area with persistent unemployment and 
have severely limited employment prospects; have limited English 
proficiency; have low literacy skills; have a disability; reside in a 
rural area; are veterans; have low employment prospects; have failed to 
find employment after using services provided under title I of the 
Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.); or are 
homeless or at risk for homelessness. (OAA Sec.513(b)(1)(E)).
    National grantee means a public or non-profit private agency or 
organization, or Tribal organization, that receives a grant under title 
V of the OAA (42 U.S.C. 3056 et seq.) to administer a SCSEP project. 
(See OAA Sec.506(g)(5)).
    OAA means the Older Americans Act, 42 U.S.C. 3001 et seq., as 
amended.
    One-Stop Center means the One-Stop Center system in a WIA local area 
which must include a comprehensive One-Stop Center through which One-
Stop partners provide applicable core services and which provides access 
to other programs and services carried out by the One-Stop partners. 
(See WIA Sec.134(c)(2)).
    One-Stop delivery system means a system under which employment and 
training programs, services, and activities are available through a 
network of eligible One-Stop partners, which assures that information 
about and access to core services is available regardless of where the 
individuals initially enter the workforce investment system. (See WIA 
Sec.134(c)(2)).
    One-Stop partner means an entity described in Sec.121(b)(1) of the 
Workforce Investment Act, i.e., required partners, or an entity 
described in Sec.121(b)(2) of the Workforce Investment Act, i.e., 
additional partners.
    Other participant (enrollee) costs means the costs of participant 
training, including the payment of reasonable costs to instructors, 
classroom rental, training supplies, materials,

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equipment, and tuition, and which may be provided before or during a 
community service assignment, in a classroom setting, or under other 
appropriate arrangements; job placement assistance, including job 
development and job search assistance; participant supportive services 
to enable a participant to successfully participate in a project, 
including the payment of reasonable costs of transportation, health care 
and medical services, special job-related or personal counseling, 
incidentals (such as work shoes, badges, uniforms, eyeglasses, and 
tools), child and adult care, temporary shelter, and follow-up services; 
and outreach, recruitment and selection, intake orientation, and 
assessments. (OAA Sec.502(c)(6)(A)(ii)-(v)).
    Pacific Island and Asian Americans means Americans having origins in 
any of the original peoples of the Far East, Southeast Asia, the Indian 
Subcontinent, or the Pacific Islands. (OAA Sec.518(a)(5)).
    Participant means an individual who is determined to be eligible for 
the SCSEP, is given a community service assignment, and is receiving any 
service funded by the program as described in subpart E.
    Persistent unemployment means that the annual average unemployment 
rate for a county or city is more than 20 percent higher than the 
national average for two out of the last three years.
    Poor employment prospects means the significant likelihood that an 
individual will not obtain employment without the assistance of the 
SCSEP or another workforce development program. Persons with poor 
employment prospects have a significant barrier to employment; 
significant barriers to employment include but are not limited to: 
lacking a substantial employment history, basic skills, and/or English-
language proficiency; lacking a high school diploma or the equivalent; 
having a disability; being homeless; or residing in socially and 
economically isolated rural or urban areas where employment 
opportunities are limited.
    Program operator means a grantee or sub-recipient that receives 
SCSEP funds from a SCSEP grantee or a higher-tier SCSEP sub-recipient 
and performs the following activities for all its participants: 
Eligibility determination, participant assessment, and development of 
and placement into community service assignments.
    Program Year means the one-year period beginning on July 1 and 
ending on June 30.
    Project means an undertaking by a grantee or sub-recipient in 
accordance with a grant or contract agreement that provides service to 
communities and training and employment opportunities to eligible 
individuals.
    Recipient means grantee. As used here, ``recipient'' includes 
``recipient'' as defined in 29 CFR 95.2(gg) and ``grantee'' as defined 
in 29 CFR 97.3.
    Residence means an individual's declared dwelling place or address 
as demonstrated by appropriate documentation.
    Rural means an area not designated as a metropolitan statistical 
area by the Census Bureau; segments within metropolitan counties 
identified by codes 4 through 10 in the Rural Urban Commuting Area 
(RUCA) system; and RUCA codes 2 and 3 for census tracts that are larger 
than 400 square miles and have population density of less than 30 people 
per square mile.
    SCSEP means the Senior Community Service Employment Program 
authorized under title V of the OAA.
    Secretary means the Secretary of the U.S. Department of Labor.
    Service area means the geographic area served by a local SCSEP 
project in accordance with a grant agreement.
    Severe disability means a severe, chronic disability attributable to 
mental or physical impairment, or a combination of mental and physical 
impairments, that--
    (1) Is likely to continue indefinitely; and
    (2) Results in substantial functional limitation in 3 or more of the 
following areas of major life activity:
    (i) Self-care;
    (ii) Receptive and expressive language;
    (iii) Learning;
    (iv) Mobility;
    (v) Self-direction;
    (vi) Capacity for independent living;
    (vii) Economic self-sufficiency. (42 U.S.C. 3002(48)).

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    Severely limited employment prospects means the substantial 
likelihood that an individual will not obtain employment without the 
assistance of the SCSEP or another workforce development program. 
Persons with severely limited employment prospects have more than one 
significant barrier to employment; significant barriers to employment 
may include but are not limited to: Lacking a substantial employment 
history, basic skills, and/or English-language proficiency; lacking a 
high school diploma or the equivalent; having a disability; being 
homeless; or residing in socially and economically isolated rural or 
urban areas where employment opportunities are limited.
    State Board means a State Workforce Investment Board established 
under WIA Sec.111.
    State grantee means the entity designated by the Governor, or the 
highest government official, to enter into a grant with the Department 
to administer a State or Territory SCSEP project under the OAA. Except 
as applied to funding distributions under Sec.506 of the OAA, this 
definition applies to the 50 States, Puerto Rico, the District of 
Columbia and the following Territories: Guam, American Samoa, U.S. 
Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
    State Plan means a plan that the Governor, or the highest government 
official, of a State must submit to the Secretary that outlines a four-
year strategy, and describes the planning and implementation process, 
for the statewide provision of community service employment and other 
authorized activities for eligible individuals under SCSEP. (See Sec.
641.300).
    Sub-recipient means the legal entity to which a sub-award of 
financial assistance is made by the grantee (or by a higher-tier sub-
recipient), and that is accountable to the grantee for the use of the 
funds provided. As used here, ``sub-recipient'' includes ``sub-grantee'' 
as defined in 29 CFR 97.3 and ``sub-recipient'' as defined in 29 CFR 
95.2(kk).
    Supportive services means services, such as transportation, health 
and medical services, special job-related or personal counseling, 
incidentals (such as work shoes, badges, uniforms, eye-glasses, and 
tools), child and adult care, housing, including temporary shelter, 
follow up services, and needs-related payments, which are necessary to 
enable an individual to participate in activities authorized under the 
SCSEP. (OAA Sec.502(c)(6)(A)(iv) and 518(a)(7)).
    Title V of the OAA means 42 U.S.C. 3056 et seq., as amended.
    Training services means those services authorized by WIA Sec.
134(d)(4).
    Tribal organization means the recognized governing body of any 
Indian tribe, or any legally established organization of Indians which 
is controlled, sanctioned, or chartered by such governing body. (42 
U.S.C. 3002(54)).
    Unemployed means an individual who is without a job and who wants 
and is available for work, including an individual who may have 
occasional employment that does not result in a constant source of 
income. (OAA 518(a)(8)).
    Veteran means an individual who is a ``covered person'' for purposes 
of the Jobs for Veterans Act, 38 U.S.C. 4215(a)(1).
    Volunteer work means:
    (1) For purposes of Sec.641.140 of this part, activities or work 
that former participants perform for a public agency of a State, local 
government or intergovernmental agency, or for a charity or not-for-
profit organization, including faith-based or community-based 
organizations, for civic, charitable, or for humanitarian reasons, and 
without promise, expectation, or receipt of compensation;
    (2) For informational reporting purposes, volunteer work also can 
include similar activities that a former participant performs on his or 
her own that are not conducted through a formal organization or agency 
as long as those activities are not performed for a member of the former 
participant's family or of the individual's own household. These types 
of volunteer activities will not be included in the calculation of the 
``entry into volunteer work'' indicator under Sec.641.140.
    Workforce Investment Act (WIA) means the Workforce Investment Act of 
1998 (Pub. L. 105-220 (Aug. 7, 1998)), 29 U.S.C. 2801 et seq., as 
amended.

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    Workforce Investment Act (WIA) regulations means regulations at 20 
CFR part 652, subpart D and parts 660-671.

[75 FR 53812, Sept. 1, 2010, as amended at 77 FR 4661, Jan. 31, 2012]

    Effective Date Note: At 77 FR 4661, Jan. 31, 2012, Sec.641.140 was 
amended by revising the definition of ``additional indicators'' and 
adding the definition of ``volunteer work''. These amendments contain 
information collection and recordkeeping requirements and will not 
become effective until approval has been given by the Office of 
Management and Budget.



        Subpart B_Coordination With the Workforce Investment Act



Sec.641.200  What is the relationship between the SCSEP and the
Workforce Investment Act?

    The SCSEP is a required partner under the Workforce Investment Act. 
As such, it is a part of the One-Stop delivery system. When acting in 
their capacity as WIA partners, SCSEP grantees and sub-recipients are 
required to follow all applicable rules under WIA and its regulations. 
(29 U.S.C. 2841(b)(1)(B)(vi) and 20 CFR 662.200 through 662.280).



Sec.641.210  What services, in addition to the applicable core services,
must SCSEP grantees and sub-recipients provide through the One-Stop
delivery system?

    In addition to providing core services, as defined at 20 CFR 662.240 
of the WIA regulations, SCSEP grantees and sub-recipients must make 
arrangements through the One-Stop delivery system to provide eligible 
and ineligible individuals with referrals to WIA intensive and training 
services and access to other activities and programs carried out by 
other One-Stop partners.



Sec.641.220  Does title I of WIA require the SCSEP to use OAA funds for 
individuals who are not eligible for SCSEP services or for services 
that are not authorized under the OAA?

    No, SCSEP requirements continue to apply. Title V resources may not 
be used to serve individuals who are not SCSEP-eligible. The Workforce 
Investment Act creates a seamless service delivery system for 
individuals seeking workforce development services by linking the One-
Stop partners in the One-Stop delivery system. Although the overall 
effect is to provide universal access to core services, SCSEP resources 
may only be used to provide services that are authorized and provided 
under the SCSEP to eligible individuals. Note, however, that one 
allowable SCSEP cost is a SCSEP project's proportionate share of One-
Stop costs. See Sec.641.850(d). Title V funds can be used to pay wages 
to SCSEP participants receiving intensive and training services under 
title I of WIA provided that the SCSEP participants have each received a 
community service assignment. All other individuals who are in need of 
the services provided under the SCSEP, but who do not meet the 
eligibility criteria to enroll in the SCSEP, should be referred to or 
enrolled in WIA or other appropriate partner programs. WIA Sec.
121(b)(1). These arrangements should be negotiated in the Memorandum of 
Understanding (MOU), which is an agreement developed and executed 
between the Local Workforce Investment Board, with the agreement of the 
chief local elected official, and the One-Stop partners relating to the 
operation of the One-Stop delivery system in the local area. The MOU is 
further described in the WIA regulations at 20 CFR Sec. Sec.662.300 
and 662.310.



Sec.641.230  Must the individual assessment conducted by the SCSEP grantee
or sub-recipient and the assessment performed by the One-Stop delivery
system be accepted for use by either entity to determine the individual's 
need for services in the SCSEP and adult programs under title I-B of WIA?

    Yes, Sec.502(b)(3) of the OAA provides that an assessment or IEP 
completed by the SCSEP satisfies any condition for an assessment, 
service strategy, or IEP completed at the One-Stop and vice-versa. (OAA 
Sec.502(b)(3)). These reciprocal arrangements and the contents of the 
SCSEP IEP and WIA IEP should be negotiated in the MOU.



Sec.641.240  Are SCSEP participants eligible for intensive and training
services under title I of WIA?

    (a) Although SCSEP participants are not automatically eligible for 
intensive and training services under title I of

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WIA, local boards may deem SCSEP participants, either individually or as 
a group, as satisfying the requirements for receiving adult intensive 
and training services under title I of WIA.
    (b) SCSEP participants who have been assessed and for whom an IEP 
has been developed have received an intensive service under 20 CFR 
663.240(a) of the WIA regulations. In order to enhance skill development 
related to the IEP, it may be necessary to provide training beyond the 
community service assignment to enable participants to meet their 
unsubsidized employment objectives. The SCSEP grantee or sub-recipient, 
the host agency, the WIA program, or another One-Stop partner may 
provide training as appropriate and as negotiated in the MOU. (See Sec.
641.540 for a further discussion of training for SCSEP participants.)



                        Subpart C_The State Plan



Sec.641.300  What is the State Plan?

    The State Plan is a plan, submitted by the Governor, or the highest 
government official, in each State, as an independent document or as 
part of the WIA Unified Plan, that outlines a four-year strategy for the 
statewide provision of community service employment and other authorized 
activities for eligible individuals under the SCSEP as described in 
Sec.641.302. The State Plan also describes the planning and 
implementation process for SCSEP services in the State, taking into 
account the relative distribution of eligible individuals and employment 
opportunities within the State. The State Plan is intended to foster 
coordination among the various SCSEP grantees and sub-recipients 
operating within the State and to facilitate the efforts of 
stakeholders, including State and local boards under WIA, to work 
collaboratively through a participatory process to accomplish the 
SCSEP's goals. (OAA Sec.503(a)(1)). The State Plan provisions are 
listed in Sec.641.325.



Sec.641.302  What is a four-year strategy?

    The State Plan must outline a four-year strategy for the statewide 
provision of community service employment and other authorized 
activities for eligible individuals under the SCSEP program. (OAA Sec.
503(a)(1)). The four-year strategy must specifically address the 
following:
    (a) The State's long-term strategy for achieving an equitable 
distribution of SCSEP positions within the State that:
    (1) Moves positions from over-served to underserved locations within 
the State, under Sec.641.365;
    (2) Equitably serves rural and urban areas; and
    (3) Serves individuals afforded priority for service, pursuant to 
Sec.641.520;
    (b) The State's long-term strategy for avoiding disruptions to the 
program when new Census or other reliable data become available, or when 
there is over-enrollment for any other reason;
    (c) The State's long-term strategy for serving minority older 
individuals under SCSEP;
    (d) Long-term projections for job growth in industries and 
occupations in the State that may provide employment opportunities for 
older workers, and how those relate to the types of unsubsidized jobs 
for which SCSEP participants will be trained, and the types of skill 
training to be provided;
    (e) The State's long-term strategy for engaging employers to develop 
and promote opportunities for the placement of SCSEP participants in 
unsubsidized employment;
    (f) The State's strategy for continuous improvement in the level of 
performance for entry into unsubsidized employment, and to achieve, at a 
minimum, the levels specified in Sec.513(a)(2)(E)(ii) of the OAA;
    (g) Planned actions to coordinate activities of SCSEP grantees with 
the activities being carried out in the State under title I of WIA, 
including plans for using the WIA One-Stop delivery system and its 
partners to serve individuals aged 55 and older;
    (h) Planned actions to coordinate activities of SCSEP grantees with 
the activities being carried out in the State under other titles of the 
OAA;
    (i) Planned actions to coordinate the SCSEP with other public and 
private entities and programs that provide services to older Americans, 
such as community and faith-based organizations, transportation 
programs, and

[[Page 204]]

programs for those with special needs or disabilities;
    (j) Planned actions to coordinate the SCSEP with other labor market 
and job training initiatives; and
    (k) The State's long-term strategy to improve SCSEP services, 
including planned longer-term changes to the design of the program 
within the State, and planned changes in the use of SCSEP grantees and 
program operators to better achieve the goals of the program; this may 
include recommendations to the Department, as appropriate.



Sec.641.305  Who is responsible for developing and submitting the State Plan?

    The Governor, or the highest governmental official, of each State is 
responsible for developing and submitting the State Plan to the 
Department.



Sec.641.310  May the Governor, or the highest government official,
delegate responsibility for developing and submitting the State Plan?

    (a) Yes, the Governor, or the highest governmental official of each 
State, may delegate responsibility for developing and submitting the 
State Plan, provided that any such delegation is consistent with State 
law and regulations.
    (b) To delegate responsibility, the Governor, or the highest 
government official, must submit to the Department a signed statement 
indicating the individual and/or organization that will be submitting 
the State Plan on his or her behalf.



Sec.641.315  Who participates in developing the State Plan?

    (a) In developing the State Plan the Governor, or the highest 
government official, must seek the advice and recommendations of 
representatives from:
    (1) The State and area agencies on aging;
    (2) State and local boards under the Workforce Investment Act (WIA);
    (3) Public and private nonprofit agencies and organizations 
providing employment services, including each grantee operating a SCSEP 
project within the State, except as provided in Sec.641.320(b);
    (4) Social service organizations providing services to older 
individuals;
    (5) Grantees under title III of the OAA;
    (6) Affected communities;
    (7) Unemployed older individuals;
    (8) Community-based organizations serving older individuals;
    (9) Business organizations; and
    (10) Labor organizations.
    (b) The Governor, or the highest government official, may also 
obtain the advice and recommendations of other interested organizations 
and individuals, including SCSEP program participants, in developing the 
State Plan. (OAA Sec.503(a)(2)).



Sec.641.320  Must all national grantees operating within a State participate 
in the State planning process?

    (a) The eligibility provision at OAA Sec.514(c)(6) requires 
national grantees to coordinate activities with other organizations at 
the State and local levels. Therefore, except as provided in paragraph 
(b) of this section, any national grantee that does not participate in 
the State planning process may be deemed ineligible to receive SCSEP 
funds in the following Program Year.
    (b) National grantees serving older American Indians, or Pacific 
Island and Asian Americans, with funds reserved under OAA Sec.
506(a)(3), are exempted from the requirement to participate in the State 
planning processes under Sec.503(a)(8) of the OAA. Although these 
national grantees may choose not to participate in the State planning 
process, the Department encourages their participation. Only those 
grantees using reserved funds are exempt; if a grantee is awarded one 
grant with reserved funds and another grant with non-reserved funds, the 
grantee is required under paragraph (a) of this section to participate 
in the State planning process for purposes of the non-reserved funds 
grant.



Sec.641.325  What information must be provided in the State Plan?

    The Department issues instructions detailing the information that 
must be provided in the State Plan. At a minimum, the State Plan must 
include the State's four-year strategy, as described

[[Page 205]]

in Sec.641.302, and information on the following:
    (a) The ratio of eligible individuals in each service area to the 
total eligible population in the State;
    (b) The relative distribution of:
    (1) Eligible individuals residing in urban and rural areas within 
the State;
    (2) Eligible individuals who have the greatest economic need;
    (3) Eligible individuals who are minorities;
    (4) Eligible individuals who are limited English proficient; and
    (5) Eligible individuals who have the greatest social need;
    (c) The current and projected employment opportunities in the State 
(such as by providing information available under Sec.15 of the 
Wagner-Peyser Act (29 U.S.C. 491-2) by occupation), and the types of 
skills possessed by eligible individuals;
    (d) The localities and populations for which projects of the type 
authorized by title V are most needed;
    (e) Actions taken and/or planned to coordinate activities of SCSEP 
grantees in the State with activities carried out in the State under 
title I of WIA;
    (f) A description of the process used to obtain advice and 
recommendations on the State Plan from representatives of organizations 
and individuals listed in Sec.641.315, and advice and recommendations 
on steps to coordinate SCSEP services with activities funded under title 
I of WIA from representatives of organizations listed in Sec.641.335;
    (g) A description of the State's procedures and time line for 
ensuring an open and inclusive planning process that provides meaningful 
opportunity for public comment as required by Sec.641.350;
    (h) Public comments received, and a summary of the comments;
    (i) A description of the steps taken to avoid disruptions to the 
greatest extent possible as provided in Sec.641.365; and
    (j) Such other information as the Department may require in the 
State Plan instructions. (OAA Sec.503(a)).



Sec.641.330  How should the State Plan reflect community service needs?

    The Governor, or the highest government official, must ensure that 
the State Plan identifies the types of community services that are 
needed and the places where these services are most needed. The State 
Plan should specifically identify the needs and locations of those 
individuals most in need of community services and the groups working to 
meet their needs. (OAA Sec.503(a)(4)(E)).



Sec.641.335  How should the Governor, or the highest government official,
address the coordination of SCSEP services with activities funded under 
title I of WIA?

    The Governor, or the highest government official, must seek the 
advice and recommendations from representatives of the State and area 
agencies on aging in the State and the State and local boards 
established under title I of WIA. (OAA Sec.503(a)(2)). The State Plan 
must describe the steps that are being taken to coordinate SCSEP 
activities within the State with activities being carried out under 
title I of WIA. (OAA Sec.503(a)(4)(F)). The State Plan must describe 
the steps being taken to ensure that the SCSEP is an active partner in 
each One-Stop delivery system and the steps that will be taken to 
encourage and improve coordination with the One-Stop delivery system.



Sec.641.340  How often must the Governor, or the highest government official,
update the State Plan?

    (a) Under instructions issued by the Department, the Governor, or 
the highest government official, must review the State Plan and submit 
an update to the State Plan to the Secretary for consideration and 
approval not less often than every two years. OAA Sec.503(a)(1). 
States are encouraged to review their State Plan more frequently than 
every two years, however, and make modifications as circumstances 
warrant, under Sec.641.345.
    (b) Before development of the update to the State Plan, the 
Governor, or the highest government official, must seek the advice and 
recommendations of the individuals and organizations identified in Sec.
641.315 about what, if any, changes are needed, and must publish the 
State Plan, showing the changes, for public comment. OAA Sec.section 
503(a)(2), 503(a)(3).

[[Page 206]]



Sec.641.345  What are the requirements for modifying the State Plan?

    (a) Modifications may be submitted anytime circumstances warrant.
    (b) Modifications to the State Plan are required when:
    (1) There are changes in Federal or State law or policy that 
substantially change the assumptions upon which the State Plan is based;
    (2) There are significant changes in the State's vision, four-year 
strategy, policies, performance indicators, or organizational 
responsibilities; or
    (3) There is a change in a grantee or grantees.
    (c) Modifications to the State Plan are subject to the same public 
comment requirements that apply to the development of the State Plan 
under Sec.641.350.
    (d) States are not required to seek the advice and recommendations 
of the individuals and organizations identified in Sec.641.315 when 
modifying the State Plan, except that States must seek the advice and 
recommendations of any national grantees operating in the State. While 
not required, states are strongly encouraged to seek the advice and 
recommendation of the relevant entities listed in Sec.641.315 when or 
if modifying the State Plan becomes necessary.
    (e) The Department will issue additional instructions for the 
procedures that must be followed when requesting modifications to the 
State Plan.



Sec.641.350  How should public comments be solicited and collected?

    The Governor, or the highest government official, should follow 
established State procedures to solicit and collect public comments. The 
State Plan must include a description of the State's procedures and 
schedule for ensuring an open and inclusive planning process that 
provides meaningful opportunity for public comment.



Sec.641.355  Who may comment on the State Plan?

    Any individual or organization may comment on the Plan.



Sec.641.360  How does the State Plan relate to the equitable
distribution report?

    The two documents address some of the same areas, but are prepared 
at different points in time. The equitable distribution report is 
prepared by State grantees at the beginning of each fiscal year and 
provides a ``snapshot'' of the actual distribution of all of the 
authorized positions within the State, grantee-by-grantee, and the 
optimum number of participant positions in each designated area based on 
the latest available Census or other reliable data. The State Plan is 
prepared by the Governor, or the highest government official, and covers 
many areas in addition to equitable distribution, as discussed in Sec.
641.325, and sets forth a proposed plan for distribution of authorized 
positions in the State. Any distribution or redistribution of positions 
made as a result of a State Plan proposal will be reflected in the next 
equitable distribution report, which then forms the basis for the 
proposed distribution in the next State Plan update. This process is 
iterative in that it moves the authorized positions from overserved 
areas to underserved areas over a period of time.



Sec.641.365  How must the equitable distribution provisions be reconciled
with the provision that disruptions to current participants should be avoided?

    (a) Governors, or highest government officials, must describe in the 
State Plan the steps that are being taken to comply with the statutory 
requirement to avoid disruptions in the provision of services for 
participants. (OAA Sec.503(a)(6)).
    (b) When there is new Census or other reliable data indicating that 
there has been a shift in the location of the eligible population or 
when there is over-enrollment for any other reason, the Department 
recommends a gradual shift in positions as they become vacant to areas 
where there has been an increase in the eligible population.
    (c) The Department does not define disruptions to mean that 
participants are entitled to remain in a subsidized community service 
assignment indefinitely. As discussed in Sec.641.570, there is

[[Page 207]]

a time limit on SCSEP participation, thus permitting positions to be 
transferred over time.
    (d) Grantees and sub-recipients must not transfer positions from one 
geographic area to another without first notifying the State agency 
responsible for preparing the State Plan and equitable distribution 
report.
    (e) Grantees must submit, in writing, any proposed changes in 
distribution that occur after submission of the equitable distribution 
report to the Department for approval.
    (f) All grantees are required to coordinate any proposed changes in 
position distribution with the other grantees in the State, including 
the State project director, before submitting the proposed changes to 
the Department for approval. The request for the Department's approval 
must include the comments of the State project director, which the 
Department will consider in making its decision.



 Subpart D_Grant Application and Responsibility Review Requirements for 
                     State and National SCSEP Grants



Sec.641.400  What entities are eligible to apply to the Department for
funds to administer SCSEP projects?

    (a) National grants. Entities eligible to apply for national grants 
include nonprofit organizations, Federal public agencies, and tribal 
organizations. These entities must provide information to establish that 
they are capable of administering a multi-State program, as required by 
the Secretary. State and local agencies may not apply for these funds.
    (b) State grants. (1) Section 506(e) of the OAA requires the 
Department to award each State a grant to provide SCSEP services. 
Governors, or highest government officials, designate an individual 
State agency as the organization to administer SCSEP funds.
    (2) If the State fails to meet its expected levels of performance 
for the core indicators for three consecutive years, it is not eligible 
to designate an agency to administer SCSEP funds in the following year. 
Instead, the State must conduct a competition to select an organization 
as the grantee of the funds allotted to the State under Sec.506(e). 
Public and nonprofit private agencies and organizations, State agencies 
other than the previously designated, failed agency, and tribal 
organizations, are eligible to be selected as a grantee for the funds. 
Other States may not be selected as a grantee for this funding.



Sec.641.410  How does an eligible entity apply?

    (a) General. An eligible entity must follow the application 
guidelines issued by the Department. The Department will issue 
application guidelines announcing the availability of national funds and 
State funds, whether they are awarded on a competitive or noncompetitive 
basis. The guidelines will contain application due dates, application 
instructions, evaluation criteria, and other necessary information.
    (b) National grant applicants. All applicants for SCSEP national 
grant funds, except for applications for grants proposing to serve older 
Indians and Pacific Island and Asian Americans with funds reserved under 
OAA Sec.506(a)(3), must submit their applications to the Governor, or 
the highest government official, of each State in which projects are 
proposed so that he or she has a reasonable opportunity to make the 
recommendations described in Sec.641.480, before submitting the 
application to the Department. (OAA Sec.503(a)(5)).
    (c) State applicants. A State that submits a Unified Plan under 
Sec.501 of WIA may include the State's SCSEP grant application in its 
Unified Plan. Any State that submits a SCSEP grant application as part 
of its WIA Unified Plan must address all of the application requirements 
as published in the Department's instructions. Sections 641.300 through 
641.365 address State Plans and modifications.



Sec.641.420  What are the eligibility criteria that each applicant must meet?

    To be eligible to receive SCSEP funds, each applicant must 
demonstrate:
    (a) An ability to administer a program that serves the greatest 
number

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of eligible participants, giving particular consideration to individuals 
with greatest economic need, individuals with greatest social need, and 
individuals described in Sec.641.570(b) or Sec.641.520(a)(2) through 
(a)(8).
    (b) An ability to administer a program that provides employment in 
community service assignments for eligible individuals in communities in 
which they reside, or in nearby communities, that will contribute to the 
general welfare of the community;
    (c) An ability to administer a program that moves eligible 
participants into unsubsidized employment;
    (d) Where the applicant has previously received a SCSEP grant, the 
applicant's prior performance in meeting SCSEP core measures of 
performance and addressing SCSEP additional measures of performance; and 
where the applicant has not received a SCSEP grant, the applicant's 
prior performance under other Federal or State programs; relevant past 
performance will also be used for scoring criterion and will be set 
forth more fully in the Solicitation for Grant Applications (see Sec.
641.460);
    (e) An ability to move participants with multiple barriers to 
employment, including individuals described in Sec.641.570(b) or Sec.
641.520(a)(2) through (a)(8), into unsubsidized employment;
    (f) An ability to coordinate activities with other organizations at 
the State and local levels, including the One-Stop delivery system;
    (g) An ability to properly manage the program, as reflected in its 
plan for fiscal management of the SCSEP;
    (h) An ability to administer a project that provides community 
service;
    (i) An ability to minimize program disruption for current 
participants and in community services provided if there is a change in 
project sponsor and/or location, and its plan for minimizing 
disruptions;
    (j) Any additional criteria that the Department deems appropriate to 
minimize disruptions for current participants. (OAA Sec.514(c)).



Sec.641.430  What are the responsibility conditions that an 
applicant must meet?

    Subject to Sec.641.440, each applicant must meet the listed 
responsibility ``tests'' by not having committed the following acts:
    (a) The Department has been unable to recover a debt from the 
applicant, whether incurred by the applicant or by one of its sub-
recipients, or the applicant has failed to comply with a debt repayment 
plan to which it agreed. In this context, a debt is established by final 
agency action, followed by three demand letters to the applicant, 
without payment in full by the applicant.
    (b) Established fraud or criminal activity of a significant nature 
within the applicant's organization.
    (c) Serious administrative deficiencies identified by the 
Department, such as failure to maintain a financial management system as 
required by Federal regulations.
    (d) Willful obstruction of the auditing or monitoring process.
    (e) Failure to provide services to applicants as agreed to in a 
current or recent grant or to meet applicable core performance measures 
or address other applicable indicators of performance.
    (f) Failure to correct deficiencies brought to the grantee's 
attention in writing as a result of monitoring activities, reviews, 
assessments, or other activities.
    (g) Failure to return a grant closeout package or outstanding 
advances within 90 days after the grant expiration date or receipt of 
closeout package, whichever is later, unless an extension has been 
requested and granted.
    (h) Failure to submit required reports.
    (i) Failure to properly report and dispose of Government property as 
instructed by the Department.
    (j) Failure to have maintained effective cash management or cost 
controls resulting in excess cash on hand.
    (k) Failure to ensure that a sub-recipient complies with applicable 
audit requirements, including OMB Circular A-133 and the audit 
requirements specified at Sec.641.821.

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    (l) Failure to audit a sub-recipient within the period required 
under Sec.641.821.
    (m) Final disallowed costs in excess of five percent of the grant or 
contract award if, in the judgment of the Grant Officer, the 
disallowances are egregious findings.
    (n) Failure to establish a mechanism to resolve a sub-recipient's 
audit in a timely fashion. (OAA Sec.514(d)(4)).



Sec.641.440  Are there responsibility conditions that alone will
disqualify an applicant?

    (a) Yes, an applicant may be disqualified if
    (1) Either of the first two responsibility tests, a or b, listed in 
Sec.641.430 is not met, or
    (2) The applicant substantially, or persistently for two or more 
consecutive years, fails one of the other responsibility tests listed in 
Sec.641.430.
    (b) The second responsibility test addresses ``fraud or criminal 
activity of a significant nature.'' The Department will determine the 
existence of significant fraud or criminal activity which typically will 
include willful or grossly negligent disregard for the use or handling 
of, or other fiduciary duties concerning, Federal funding, where the 
grantee has no effective systems, checks, or safeguards to detect or 
prevent fraud or criminal activity. Additionally, significant fraud or 
criminal activity will typically include coordinated patterns or 
behaviors that pervade a grantee's administration or are committed by 
the higher levels of a grantee's management or authority. The Department 
will determine whether ``fraud or criminal activity of a significant 
nature'' has occurred on a case-by-case basis, regardless of what party 
identifies the alleged fraud or criminal activity.



Sec.641.450  How will the Department examine the responsibility of
eligible entities?

    The Department will review available records to assess each 
applicant's overall fiscal and administrative ability to manage Federal 
funds. The Department's responsibility review may consider all relevant 
information, including the organization's history of managing other 
grants awarded by the Department or by other Federal agencies. (OAA 
Sec.514(d)(1) and (d)(2)).



Sec.641.460  What factors will the Department consider in selecting
national grantees?

    The Department will select national grantees from among applicants 
that are able to meet the eligibility and responsibility review criteria 
at Sec.514 of the OAA. (Section 641.420 contains the eligibility 
criteria and Sec. Sec.641.430 and 641.440 contain the responsibility 
criteria.) The Department also will take the rating criteria described 
in the Solicitation for Grant Applications or other instrument into 
consideration. These rating criteria will include relevant past 
performance.



Sec.641.465  Under what circumstances may the Department reject an application?

    (a) The Department may question any proposed project component of an 
application if it believes that the component will not serve the 
purposes of the SCSEP. The Department may reject the application if the 
applicant does not submit or negotiate an acceptable alternative.
    (b) The Department may reject any application that the Grant Officer 
determines unacceptable based on the content of the application, rating 
score, past performance, fiscal management, or any other factor the 
Grant Officer believes serves the best interest of the program, 
including the application's comparative rating in a competition.



Sec.641.470  What happens if an applicant's application is rejected?

    (a) Any entity whose application is rejected in whole or in part 
will be informed that it has not been selected. The non-selected entity 
may request an explanation of the Department's basis for its rejection. 
If requested, the Department will provide the entity with feedback on 
its proposal. The non-selected entity may follow the procedures in Sec.
641.900.
    (b) Incumbent grantees will not have an opportunity to obtain 
technical assistance provided by the Department under OAA Sec.
513(d)(2)(B)(i) to cure, in

[[Page 210]]

an open competition, any deficiency in a proposal because that will 
create inequity in favor of incumbents. Nor, during an open competition, 
will the Department provide assistance to any applicant to improve its 
application.
    (c) If the Administrative Law Judge (ALJ) rules, under Sec.
641.900, that the organization should have been selected, in whole or in 
part, the matter must be remanded to the Grant Officer. The Grant 
Officer must, within 10 working days, determine whether the organization 
continues to meet the requirements of this part, and whether the 
positions which are the subject of the ALJ's decision will be awarded, 
in whole or in part, to the organization and the timing of the award. In 
making this determination, the Grant Officer must take into account 
disruption to participants, disruption to grantees, and the operational 
needs of the SCSEP.
    (d) In the event that the Grant Officer determines that it is not 
feasible to award any positions to the appealing applicant, the 
applicant will be awarded its bid preparation costs, or a pro rata share 
of those costs if the Grant Officer's finding applies to only a portion 
of the funds that would be awarded. If positions are awarded to the 
appealing applicant, that applicant is not entitled to the full grant 
amount but will only receive the funds remaining in the grant that have 
not been expended by the current grantee through its operation of the 
grant and its subsequent closeout. The available remedy in a SCSEP non-
selection appeal is neither retroactive nor immediately effective 
selection; rather it is the potential to be selected as a SCSEP grantee 
as quickly as administratively feasible in the future, for the remainder 
of the grant cycle.
    (e) In the event that any party notifies the Grant Officer that it 
is not satisfied with the Grant Officer's decision, the Grant Officer 
must return the decision to the ALJ for review.
    (f) Any organization selected and/or funded as a SCSEP grantee is 
subject to having its positions reduced or to being removed as a SCSEP 
grantee if an ALJ decision so orders. The Grant Officer provides 
instructions on transition and closeout to both the newly designated 
grantee and to the grantee whose positions are affected or which is 
being removed. All parties must agree to the provisions of this 
paragraph as a condition of being a SCSEP grantee.



Sec.641.480  May the Governor, or the highest government official, 
make recommendations to the Department on national grant applications?

    (a) Yes, in accordance with Sec.641.410(b), each Governor, or 
highest government official, will have a reasonable opportunity to make 
comments on any application to operate a SCSEP project located in the 
Governor's, or the highest government official's, State before the 
Department makes a final decision on a grant award. The Governor's, or 
the highest government official's, comments should be directed to the 
Department and may include the anticipated effect of the proposal on the 
overall distribution of program positions within the State; 
recommendations for redistribution of positions to underserved areas as 
vacancies occur in previously encumbered positions in other areas; and 
recommendations for distributing any new positions that may become 
available as a result of an increase in funding for the State. The 
Governor's, or the highest government official's, recommendations should 
be consistent with the State Plan. (OAA Sec.503(a)(5)).
    (b) The Governor, or the highest government official, has the option 
of making the authorized recommendations on all applications or only on 
those applications proposed for award following the rating process. It 
is incumbent on each Governor, or the highest government official, to 
inform the Department of his or her intent to review the applications 
before or after the rating process.



Sec.641.490  When will the Department compete SCSEP grant awards?

    (a)(1) The Department will hold a full and open competition for 
national grants every four years. (OAA Sec.514(a)(1)).
    (2) If a national grantee meets the expected level of performance 
for each of the core indicators for each of the four years, the 
Department may provide an

[[Page 211]]

additional one-year grant to the national grantee. (OAA Sec.
514(a)(2)).



Sec.641.495  When must a State compete its SCSEP award?

    If a State grantee fails to meet its expected levels of performance 
for three consecutive Program Years, the State must hold a full and open 
competition, under such conditions as the Secretary may provide, for the 
State SCSEP funds for the full Program Year following the determination 
of consecutive failure. (OAA Sec.513(d)(3)(B)(iii)). The incumbent 
(failed) grantee is not eligible to compete. Other states are also not 
eligible to compete for these funds. Sec.641.400(b)(2).



                   Subpart E_Services to Participants



Sec.641.500  Who is eligible to participate in the SCSEP?

    Anyone who is at least 55 years old, unemployed (as defined in Sec.
641.140), and who is a member of a family with an income that is not 
more than 125 percent of the family income levels prepared by the 
Department of Health and Human Services and approved by OMB (Federal 
poverty guidelines) is eligible to participate in the SCSEP. (OAA Sec.
518(a)(3), (8)). A person with a disability may be treated as a ``family 
of one'' for income eligibility determination purposes at the option of 
the applicant.



Sec.641.505  When is eligibility determined?

    Initial eligibility is determined at the time individuals apply to 
participate in the SCSEP. Once individuals become SCSEP participants, 
the grantee or sub-recipient is responsible for verifying their 
continued eligibility at least once every 12 months. Grantees and sub-
recipients may also verify an individual's eligibility as circumstances 
require, including instances when enrollment is delayed.



Sec.641.507  How is applicant income computed?

    An applicant's income is computed by calculating the includable 
income received by the applicant during the 12-month period ending on 
the date an individual submits an application to participate in the 
SCSEP, or the annualized income for the 6-month period ending on the 
application date. The Department requires grantees to use whichever 
method is more favorable to the individual. (OAA Sec.518(a)(4)).



Sec.641.510  What types of income are included and excluded for 
participant eligibility determinations?

    (a) With certain exceptions, the Department will use the definition 
of income from the U.S. Census Bureau's Current Population Survey (CPS) 
as the standard for determining SCSEP applicant income eligibility.
    (b) Any income that is unemployment compensation, a benefit received 
under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.), a 
payment made to or on behalf of veterans or former members of the Armed 
Forces under the laws administered by the Secretary of Veterans Affairs, 
or 25 percent of a benefit received under title II of the Social 
Security Act (42 U.S.C. 401 et seq.), must be excluded from SCSEP income 
eligibility determinations. (OAA Sec.518(a)(3)(A)).
    (c) The Department has issued administrative guidance on income 
inclusions and exclusions and procedures for determining SCSEP income 
eligibility. This guidance may be updated periodically.



Sec.641.512  May grantees and sub-recipients enroll otherwise eligible 
job ready individuals and place them directly into unsubsidized employment?

    No, grantees and sub-recipients may not enroll as SCSEP participants 
job-ready individuals who can be directly placed into unsubsidized 
employment. Such individuals should be referred to an employment 
provider, such as the One-Stop Center for job placement assistance under 
WIA or another employment program.



Sec.641.515  How must grantees and sub-recipients recruit and select
eligible individuals for participation in the SCSEP?

    (a) Grantees and sub-recipients must develop methods of recruitment 
and selection that assure that the maximum number of eligible 
individuals have an

[[Page 212]]

opportunity to participate in the program. To the extent feasible, 
grantees and sub-recipients should seek to enroll minority and Indian 
eligible individuals, eligible individuals with limited English 
proficiency, and eligible individuals with greatest economic need, at 
least in proportion to their numbers in the area, taking into 
consideration their rates of poverty and unemployment. (OAA Sec.
502(b)(1)(M)).
    (b) Grantees and sub-recipients must use the One-Stop delivery 
system as one method in the recruitment and selection of eligible 
individuals to ensure that the maximum number of eligible individuals 
have an opportunity to participate in the project. (OAA Sec.
502(b)(1)(H)).
    (c) States may enter into agreements among themselves to permit 
cross-border enrollment of eligible participants. Such agreements should 
cover both State and national grantee positions and must be submitted to 
the Department for approval in the grant application or a modification 
of the grant.



Sec.641.520  Are there any priorities that grantees and sub-recipients 
must use in selecting eligible individuals for participation in the SCSEP?

    (a) Yes, in selecting eligible individuals for participation in the 
SCSEP, priority must be given to individuals who have one or more of the 
following characteristics:
    (1) Are 65 years of age or older;
    (2) Have a disability;
    (3) Have limited English proficiency or low literacy skills;
    (4) Reside in a rural area;
    (5) Are veterans (or, in some cases, spouses of veterans) for 
purposes of Sec.2(a) of the Jobs for Veterans Act, 38 U.S.C. 4215(a) 
as set forth in paragraph (b) of this section;
    (6) Have low employment prospects;
    (7) Have failed to find employment after using services provided 
through the One-Stop delivery system; or
    (8) Are homeless or are at risk for homelessness. (OAA Sec.
518(b)).
    (b) Section 2(a) of the Jobs for Veterans Act creates a priority for 
service for veterans (and, in some cases, spouses of veterans) who 
otherwise meet the program eligibility criteria for the SCSEP. 38 U.S.C. 
4215(a). Priority is extended to veterans. Priority is also extended to 
the spouse of a veteran who died of a service-connected disability; the 
spouse of a member of the Armed Forces on active duty who has been 
listed for a total of more than 90 days as missing in action, captured 
in the line of duty by a hostile force, or forcibly detained by a 
foreign government or power; the spouse of any veteran who has a total 
disability resulting from a service-connected disability; and the spouse 
of any veteran who died while a disability so evaluated was in 
existence.
    (c) Grantees and sub-recipients must apply these priorities in the 
following order:
    (1) Persons who qualify as a veteran or qualified spouse under Sec.
2(a) of the Jobs for Veterans Act, 38 U.S.C. 4215(a), and who possess at 
least one of the other priority characteristics;
    (2) Persons who qualify as a veteran or qualified spouse under Sec.
2(a) of the Jobs for Veterans Act, 38 U.S.C. 4215(a), who do not possess 
any other of the priority characteristics;
    (3) Persons who do not qualify as a veteran or qualified spouse 
under Sec.2(a) of the Jobs for Veterans Act (non-veterans), and who 
possess at least one of the other priority characteristics.



Sec.641.535  What services must grantees and sub-recipients provide 
to participants?

    (a) When individuals are selected for participation in the SCSEP, 
the grantee or sub-recipient is responsible for:
    (1) Providing orientation to the SCSEP, including information on 
project goals and objectives, community service assignments, training 
opportunities, available supportive services, the availability of a free 
physical examination, participant rights and responsibilities, and 
permitted and prohibited political activities;
    (2)(i) Assessing participants' work history, skills and interests, 
talents, physical capabilities, aptitudes, needs for supportive 
services, occupational preferences, training needs, potential for 
performing community service assignments, and potential for transition 
to unsubsidized employment;
    (ii) Performing an initial assessment upon program entry, unless an 
assessment has already been performed under

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title I of WIA as provided in Sec.641.230. Subsequent assessments may 
be made as necessary, but must be made no less frequently than two times 
during a twelve month period (including the initial assessment);
    (3)(i) Using the information gathered during the initial assessment 
to develop an IEP that includes an appropriate employment goal for each 
participant, except that if an assessment has already been performed and 
an IEP developed under title I of WIA, the WIA assessment and IEP will 
satisfy the requirement for a SCSEP assessment and IEP as provided in 
Sec.641.230;
    (ii) Updating the IEP as necessary to reflect information gathered 
during the subsequent participant assessments (OAA Sec.502(b)(1)(N));
    (iii) The initial IEP should include an appropriate employment goal 
for each participant. Thereafter, if the grantee determines that the 
participant is not likely to obtain unsubsidized employment, the IEP 
must reflect other approaches to help the participant achieve self-
sufficiency, including the transition to other services or programs.
    (4) Placing participants in appropriate community service 
assignments in the community in which they reside, or in a nearby 
community (OAA Sec.502(b)(1)(B));
    (5) Providing or arranging for training identified in participants' 
IEPs and consistent with the SCSEP's goal of unsubsidized employment 
(OAA Sec.502(a)(1), 502(b)(1)(B), 502(b)(1)(I), 502(b)(1)(N)(ii));
    (6) Assisting participants in obtaining needed supportive services 
identified in their IEPs (OAA Sec.502(b)(1)(N));
    (7) Providing appropriate services for participants, or referring 
participants to appropriate services, through the One-Stop delivery 
system established under WIA (OAA Sec.502(b)(1)(O));
    (8) Providing counseling on participants' progress in meeting the 
goals and objectives identified in their IEPs, and in meeting their 
supportive service needs (OAA Sec.502(b)(1)(N)(iii));
    (9) Providing participants with wages and benefits for time spent in 
the community service assignment, orientation, and training (OAA Sec.
502(b)(1)(I), 502(b)(1)(J), 502(c)(6)(A)(i)) (see also Sec. Sec.
641.565 and 641.540(f), addressing wages and benefits);
    (10) Ensuring that participants have safe and healthy working 
conditions at their community service employment worksites (OAA Sec.
502(b)(1)(J));
    (11) Assisting participants in obtaining unsubsidized employment, 
including providing or arranging for employment counseling in support of 
their IEPs;
    (b) The Department may issue administrative guidance that clarifies 
the requirements of paragraph (a).
    (c) Grantees may not use SCSEP funds for job ready individuals who 
only need job search assistance or job referral services. Grantees may 
provide job search assistance and job club activities to participants 
who are enrolled in the SCSEP and are assigned to community service 
assignments. (See also Sec.641.512).



Sec.641.540  What types of training may grantees and sub-recipients
provide to SCSEP participants in addition to the training received 
at a community service assignment?

    (a) In addition to the training provided in a community service 
assignment, grantees and sub-recipients may arrange skill training 
provided that it:
    (1) Is realistic and consistent with the participants' IEP;
    (2) Makes the most effective use of the participant's skills and 
talents; and
    (3) Prepares the participant for unsubsidized employment.
    (b) Training may be provided before or during a community service 
assignment.
    (c) Training may be in the form of lectures, seminars, classroom 
instruction, individual instruction, online instruction, on-the-job 
experiences. Training may be provided by the grantee or through other 
arrangements, including but not limited to, arrangements with other 
workforce development programs such as WIA. (OAA Sec.
502(c)(6)(A)(ii)).
    (d) Grantees and sub-recipients are encouraged to obtain training 
through locally available resources, including host agencies, at no cost 
or reduced cost to the SCSEP.
    (e) Grantees and sub-recipients may pay for participant training, 
including

[[Page 214]]

the payment of reasonable costs of instructors, classroom rental, 
training supplies, materials, equipment, and tuition. (OAA Sec.
502(c)(6)(A)(ii)).
    (f) Participants must be paid wages while in training, as described 
in Sec.641.565(a). (OAA Sec.502(b)(1)(I)).
    (g) As provided in Sec.641.545, grantees and sub-recipients may 
pay for costs associated with supportive services, such as 
transportation, necessary to participate in training. (OAA Sec.
502(b)(1)(L)).
    (h) Nothing in this section prevents or limits participants from 
engaging in self-development training available through other sources, 
at their own expense, during hours when not performing their community 
service assignments.



Sec.641.545  What supportive services may grantees and sub-recipients 
provide to participants?

    (a) Grantees and sub-recipients are required to assess all 
participants' need for supportive services and to make every effort to 
assist participants in obtaining needed supportive services. Grantees 
and sub-recipients may provide directly or arrange for supportive 
services that are necessary to enable an individual to successfully 
participate in a SCSEP project, including but not limited to payment of 
reasonable costs of transportation; health and medical services; special 
job-related or personal counseling; incidentals such as work shoes, 
badges, uniforms, eyeglasses, and tools; dependent care; housing, 
including temporary shelter; needs-related payments; and follow-up 
services. (OAA Sec. Sec.502(c)(6)(A)(iv), 518(a)(7)).
    (b) To the extent practicable, the grantee or sub-recipient should 
arrange for the payment of these expenses from other resources.
    (c) Grantees and sub-recipients are encouraged to contact placed 
participants throughout the first 12 months following placement to 
determine if they have the necessary supportive services to remain in 
the job and to provide or arrange to provide such services if feasible.



Sec.641.550  What responsibility do grantees and sub-recipients have to 
place participants in unsubsidized employment?

    For those participants whose IEPs include a goal of unsubsidized 
employment, grantees and sub-recipients are responsible for working with 
participants to ensure that the participants are receiving services and 
taking actions designed to help them achieve this goal. Grantees and 
sub-recipients must contact private and public employers directly or 
through the One-Stop delivery system to develop or identify suitable 
unsubsidized employment opportunities. They must also encourage host 
agencies to assist participants in their transition to unsubsidized 
employment, including unsubsidized employment with the host agency.



Sec.641.565  What policies govern the provision of wages and benefits 
to participants?

    (a) Wages. (1)(i) Grantees and sub-recipients must pay participants 
the highest applicable required wage for time spent in orientation, 
training, and community service assignments.
    (ii) SCSEP participants may be paid the highest applicable required 
wage while receiving WIA intensive services.
    (2) The highest applicable required wage is either the minimum wage 
applicable under the Fair Labor Standards Act of 1938; the State or 
local minimum wage for the most nearly comparable covered employment; or 
the prevailing rate of pay for persons employed in similar public 
occupations by the same employer.
    (3) Grantees and sub-recipients must make any adjustments to minimum 
wage rates payable to participants as may be required by Federal, State, 
or local statute during the grant term.
    (b) Benefits--(1) Required benefits. Except as provided in paragraph 
(b)(2) of this section, grantees and sub-recipients must ensure that 
participants receive such benefits as are required by law.
    (i) Grantees and sub-recipients must provide benefits uniformly to 
all participants within a project or subproject, unless the Department 
agrees

[[Page 215]]

to waive this provision due to a determination that such a waiver is in 
the best interests of applicants, participants, and project 
administration.
    (ii) Grantees and sub-recipients must offer participants the 
opportunity to receive physical examinations annually.
    (A) Physical examinations are a benefit, and not an eligibility 
criterion. The examining physician must provide, to the participant 
only, a written report of the results of the examination.
    (B) Participants may choose not to accept the physical examination. 
In that case, the grantee or sub-recipient must document this refusal, 
through a signed statement, within 60 workdays after commencement of the 
community service assignment. Each year thereafter, grantees and sub-
recipients must offer the physical examination and document the offer 
and any participant's refusal.
    (C) Grantees and sub-recipients may use SCSEP funds to pay the costs 
of physical examinations.
    (iii) When participants are not covered by the State workers' 
compensation law, the grantee or sub-recipient must provide participants 
with workers' compensation benefits equal to those provided by law for 
covered employment. OAA Sec.504(b).
    (iv) If required by State law, grantees/sub-recipients must provide 
unemployment compensation coverage for participants.
    (v) Grantees and sub-recipients must provide compensation for 
scheduled work hours during which a host agency's business is closed for 
a Federal holiday, which may be paid or in the form of rescheduled work 
time.
    (vi) Grantees and sub-recipients must provide necessary sick leave 
that is not part of an accumulated sick leave program, which may be paid 
or in the form of rescheduled work time.
    (2) Prohibited wage and benefits costs. (i) Participants may not 
carry over allowable benefits from one Program Year to the next;
    (ii) Grantees and sub-recipients may not provide payment or 
otherwise compensate participants for unused benefits such as sick leave 
or holidays;
    (iii) Grantees and sub-recipients may not use SCSEP funds to cover 
costs associated with the following participant benefits:
    (A) Retirement. Grantees and sub-recipients may not use SCSEP funds 
to provide contributions into a retirement system or plan, or to pay the 
cost of pension benefits for program participants.
    (B) Annual leave.
    (C) Accumulated sick leave.
    (D) Bonuses. (OAA Sec.502(c)(6)(A)(i)).



Sec.641.570  Is there a time limit for participation in the program?

    (a) Individual time limit. (1) Eligible individuals may participate 
in the program for a maximum duration of 48 months in the aggregate 
(whether or not consecutive), from the later of July 1, 2007, or the 
date of the individual's enrollment in the program.
    (2) At the time of enrollment, the grantee or sub-recipient must 
inform the participant of this time limit and the possible extension 
available under paragraph (b) of this section, and the grantee or sub-
recipient must provide for a system to transition participants to 
unsubsidized employment or other assistance before the maximum 
enrollment duration has expired. Provisions for transition must be 
reflected in the participant's IEP.
    (3) If requested by a grantee or sub-recipient, the Department will 
authorize an extension for individuals who meet the criteria in 
paragraph (b) of this section. Notwithstanding any individual extensions 
granted, grantees and sub-recipients must ensure that projects do not 
exceed the overall average participation cap for all participants, as 
described in paragraph (c) of this section.
    (b) Increased periods of individual participation. If requested by a 
grantee, the Department will authorize increased periods of 
participation for individuals who:
    (1) Have a severe disability;
    (2) Are frail or are age 75 or older;
    (3) Meet the eligibility requirements related to age for, but do not 
receive, benefits under title II of the Social Security Act (42 U.S.C. 
401 et seq.);
    (4) Live in an area with persistent unemployment and are individuals 
with severely limited employment prospects; or

[[Page 216]]

    (5) Have limited English proficiency or low literacy skills.
    (c) Average grantee participation cap. (1) Notwithstanding any 
individual extension authorized under paragraph (b) of this section, 
each grantee must manage its SCSEP project in such a way that the 
grantee does not exceed an average participation cap for all 
participants of 27 months (in the aggregate).
    (2) A grantee may request, and the Department may authorize, an 
extended average participation period of up to 36 months (in the 
aggregate) for a particular project area in a given Program Year if the 
Department determines that extenuating circumstances exist to justify an 
extension, due to one more of the following factors:
    (i) High rates of unemployment or of poverty or of participation in 
the program of block grants to States for temporary assistance for needy 
families established under part A of title IV of the Social Security 
Act, in the areas served by a grantee, relative to other areas of the 
State involved or the Nation;
    (ii) Significant downturns in the economy of an area served by the 
grantee or in the national economy;
    (iii) Significant numbers or proportions of participants with one or 
more barriers to employment, including ``most-in-need'' individuals 
described in Sec.641.710(a)(6), served by a grantee relative to such 
numbers or proportions for grantees serving other areas of the State or 
Nation;
    (iv) Changes in Federal, State, or local minimum wage requirements; 
or
    (v) Limited economies of scale for the provision of community 
service employment and other authorized activities in the areas served 
by the grantee.
    (3) For purposes of the average participation cap, each grantee will 
be considered to be one project.
    (d) Authorized break in participation. On occasion a participant 
takes an authorized break in participation from the program, such as a 
formal leave of absence necessitated by personal circumstances or a 
break caused because a suitable community service assignment is not 
available. Such an authorized break, if taken under a formal grantee 
policy allowing such breaks and formally entered into the SCSEP 
Performance and Results Quarterly Performance Reporting (SPARQ) system, 
will not count toward the individual time limit described in paragraph 
(a) or the average participation cap described in paragraph (c) of this 
section.
    (e) Administrative guidance. The Department will issue 
administrative guidance detailing the process by which a grantee may 
request increased periods of individual participation, and the process 
by which a grantee may request an extension of the average participation 
cap. The process will require that the determination of individual 
participant extension requests is made in a fair and equitable manner.
    (f) Grantee authority. Grantees may limit the time of participation 
for individuals to less than the 48 months described in paragraph (a) of 
this section, if the grantee uniformly applies the lower participation 
limit, and if the grantee submits a description of the lower 
participation limit policy in its grant application or modification of 
the grant and the Department approves the policy. (OAA Sec. Sec.
502(b)(1)(C), 518(a)(3)(B)).



Sec.641.575  May a grantee or sub-recipient establish a limit on the 
amount of time its participants may spend at a host agency?

    Yes, grantees and sub-recipients may establish limits on the amount 
of time that participants spend at a particular host agency, and are 
encouraged to rotate participants among different host agencies, or to 
different assignments within the same host agency, as such rotations may 
increase participants' skills development and employment opportunities. 
Such limits must be established in the grant agreement or modification 
of the grant, and approved by the Department. The Department will not 
approve any limit that does not require an individualized determination 
that rotation is in the best interest of the participant and will 
further the acquisition of skills listed in the IEP. Host agency 
rotations have no effect on either the individual participation limit or 
the average participation cap.

[[Page 217]]



Sec.641.577  Is there a limit on community service assignment hours?

    While there is no specific limit on the number of hours that may be 
worked in a community service assignment, a community service assignment 
must be a part-time position. However, the Department strongly 
encourages grantees to use 1,300 hours as a benchmark and good practice 
for monitoring community service hours.



Sec.641.580  Under what circumstances may a grantee or sub-recipient
terminate a participant?

    (a) If, at any time, a grantee or sub-recipient determines that a 
participant was incorrectly declared eligible as a result of false 
information knowingly given by that individual, the grantee or sub-
recipient must give the participant immediate written notice explaining 
the reason(s) for termination and may terminate the participant 30 days 
after it has provided the participant with written notice.
    (b) If, during eligibility verification under Sec.641.505, a 
grantee or sub-recipient finds a participant to be no longer eligible 
for enrollment, the grantee or sub-recipient must give the participant 
written notice explaining the reason(s) for termination and may 
terminate the participant 30 days after it has provided the participant 
with written notice.
    (c) If, at any time, the grantee or sub-recipient determines that it 
incorrectly determined a participant to be eligible for the program 
through no fault of the participant, the grantee or sub-recipient must 
give the participant immediate written notice explaining the reason(s) 
for termination and may terminate the participant 30 days after it has 
provided the participant with written notice.
    (d) A grantee or sub-recipient may terminate a participant for 
cause. Grantees must include their policies concerning for-cause 
terminations in the grant application and obtain the Department's 
approval. The grantee or sub-recipient must give the participant written 
notice explaining the reason(s) for termination and may terminate the 
participant 30 days after it has provided the participant with written 
notice.
    (e) A grantee or sub-recipient may terminate a participant if the 
participant refuses to accept a reasonable number of job offers or 
referrals to unsubsidized employment consistent with the IEP and there 
are no extenuating circumstances that would hinder the participant from 
moving to unsubsidized employment. The grantee or sub-recipient must 
give the participant written notice explaining the reason(s) for 
termination and may terminate the participant 30 days after it has 
provided the participant with written notice.
    (f) When a grantee or sub-recipient makes an unfavorable 
determination of enrollment eligibility under paragraph (b) or (c) of 
this section, it should refer the individual to other potential sources 
of assistance, such as the One-Stop delivery system. When a grantee or 
sub-recipient terminates a participant under paragraph (d) or (e) of 
this section, it may refer the individual to other potential sources of 
assistance, such as the One-Stop delivery system.
    (g) Grantees and sub-recipients must provide each participant at the 
time of enrollment with a written copy of its policies for terminating a 
participant for cause or otherwise, and must verbally review those 
policies with each participant.
    (h) Any termination, as described in paragraphs (a) through (e) of 
this section, must be consistent with administrative guidelines issued 
by the Department and the termination notice must inform the participant 
of the grantee's grievance procedure, and the termination must be 
subject to the applicable grievance procedures described in Sec.
641.910.
    (i) Participants may not be terminated from the program solely on 
the basis of their age. Grantees and sub-recipients may not impose an 
upper age limit for participation in the SCSEP.



Sec.641.585  What is the employment status of SCSEP participants?

    (a) Participants are not considered Federal employees solely as a 
result of their participation in the SCSEP. (OAA Sec.504(a)).
    (b) Grantees must determine whether or not a participant qualifies 
as an employee of the grantee, sub-recipient,

[[Page 218]]

local project, or host agency, under applicable law. Responsibility for 
this determination rests with the grantee even when a Federal agency is 
a grantee or host agency.



         Subpart F_Pilot, Demonstration, and Evaluation Projects



Sec.641.600  What is the purpose of the pilot, demonstration, and
evaluation projects authorized under Sec.502(e) of the OAA?

    The purpose of the pilot, demonstration, and evaluation projects 
authorized under Sec.502(e) of the OAA is to develop and implement 
techniques and approaches, and to demonstrate the effectiveness of these 
techniques and approaches, in addressing the employment and training 
needs of individuals eligible for SCSEP.



Sec.641.610  How are pilot, demonstration, and evaluation projects administered?

    The Department may enter into agreements with States, public 
agencies, nonprofit private organizations, or private business concerns, 
as may be necessary, to conduct pilot, demonstration, and evaluation 
projects.



Sec.641.620  How may an organization apply for pilot, demonstration, and 
evaluation project funding?

    Organizations applying for pilot, demonstration, and evaluation 
project funding must follow the instructions issued by the Department. 
Instructions for these unique funding opportunities are published in 
TEGLs available at http://www.doleta.gov/Seniors.



Sec.641.630  What pilot, demonstration, and evaluation project activities
are allowable under Sec.502(e)?

    Allowable pilot, demonstration and evaluation projects include:
    (a) Activities linking businesses and eligible individuals, 
including activities providing assistance to participants transitioning 
from subsidized activities to private sector employment;
    (b) Demonstration projects and pilot projects designed to:
    (1) Attract more eligible individuals into the labor force;
    (2) Improve the provision of services to eligible individuals under 
One-Stop delivery systems established under title I of WIA;
    (3) Enhance the technological skills of eligible individuals; and
    (4) Provide incentives to SCSEP grantees for exemplary performance 
and incentives to businesses to promote their participation in the 
SCSEP;
    (c) Demonstration projects and pilot projects, as described in 
paragraph (b) of this section, for workers who are older individuals 
(but targeted to eligible individuals) only if such demonstration 
projects and pilot projects are designed to assist in developing and 
implementing techniques and approaches in addressing the employment and 
training needs of eligible individuals;
    (d) Provision of training and technical assistance to support a 
SCSEP project;
    (e) Dissemination of best practices relating to employment of 
eligible individuals; and
    (f) Evaluation of SCSEP activities.



Sec.641.640  Should pilot, demonstration, and evaluation project 
entities coordinate with SCSEP grantees and sub-recipients, including
area agencies on aging?

    (a) To the extent practicable, the Department will provide an 
opportunity, before the development of a demonstration or pilot project, 
for the appropriate area agency on aging and SCSEP grantees and sub-
grantees to submit comments on the project in order to ensure 
coordination of SCSEP activities with activities carried out under this 
subpart.
    (b) To the extent practicable, entities carrying out pilot, 
demonstration, and evaluation projects must consult with appropriate 
area agencies on aging, SCSEP grantees and sub-grantees, and other 
appropriate agencies and entities to promote coordination of SCSEP and 
pilot, demonstration, and evaluation activities. (OAA Sec.502(e)).

[[Page 219]]



                  Subpart G_Performance Accountability



Sec.641.700  What performance measures/indicators apply to SCSEP grantees?

    (a) Indicators of performance. There are currently eight performance 
measures, of which six are core indicators and two are additional 
indicators. Core indicators (defined in Sec.641.710) are subject to 
goal-setting and corrective action (described in Sec.641.720); that 
is, performance level goals for each core indicator must be agreed upon 
between the Department and each grantee before the start of each program 
year, and if a grantee fails to meet the performance level goals for the 
core indicators, that grantee is subject to corrective action. 
Additional indicators (defined in Sec.641.710) are not subject to 
goal-setting and are, therefore, also not subject to corrective action.
    (b) Core indicators. Section 513(b)(1) of the 2006 OAA establishes 
the following core indicators of performance:
    (1) Hours (in the aggregate) of community service employment;
    (2) Entry into unsubsidized employment;
    (3) Retention in unsubsidized employment for six months;
    (4) Earnings;
    (5) The number of eligible individuals served; and
    (6) The number of most-in-need individuals served (the number of 
participating individuals described in Sec.518(a)(3)(B)(ii) or (b)(2) 
of the OAA).
    (c) Additional indicators. Section 513(b)(2) of the 2006 OAA 
establishes the following additional indicators of performance:
    (1) Retention in unsubsidized employment for one year; and
    (2) Satisfaction of the participants, employers, and their host 
agencies with their experiences and the services provided.
    (3) Any other indicators of performance that the Secretary 
determines to be appropriate to evaluate services and performance.
    (4) The Secretary has designated entry into volunteer work as an 
additional indicator.
    (d) Affected entities. The core indicators of performance and 
additional indicators of performance are applicable to each grantee 
without regard to whether the grantee operates the program directly or 
through sub-contracts, sub-grants, or agreements with other entities. 
Grantees must assure that their sub-grantees and lower-tier sub-grantees 
are collecting and reporting program data.
    (e) Required evaluation and reporting. An agreement to be evaluated 
on the core indicators of performance and to report information on the 
additional indicators of performance is a requirement for application 
for, and is a condition of, all SCSEP grants.

[75 FR 53812, Sept. 1, 2010, as amended at 77 FR 4661, Jan. 31, 2012]

    Effective Date Note: At 77 FR 4661, Jan. 31, 2012, in Sec.641.700 
paragraph (c)(4) was added. This paragraph contains information 
collection and recordkeeping requirements and will not become effective 
until approval has been given by the Office of Management and Budget.



Sec.641.710  How are the performance indicators defined?

    (a) The core indicators are defined as follows:
    (1) ``Hours of community service employment'' is defined as the 
total number of hours of community service provided by SCSEP 
participants divided by the number of hours of community service funded 
by the grantee's grant, after adjusting for differences in minimum wage 
among the States and areas. Paid training hours are excluded from this 
measure.
    (2) ``Entry into unsubsidized employment'' is defined by the 
formula: Of those who are not employed at the date of participation: The 
number of participants who are employed in the first quarter after the 
exit quarter divided by the number of adult participants who exit during 
the quarter.
    (3) ``Retention in unsubsidized employment for six months'' is 
defined by the formula: Of those who are employed in the first quarter 
after the exit quarter: The number of adult participants who are 
employed in both the second and third quarters after the exit quarter 
divided by the number of adult participants who exit during the quarter.

[[Page 220]]

    (4) ``Earnings'' is defined by the formula: Of those participants 
who are employed in the first, second and third quarters after the exit 
quarter: Total earnings in the second quarter plus total earnings in the 
third quarter after the exit quarter divided by the number of 
participants who exit during the quarter.
    (5) ``The number of eligible individuals served'' is defined as the 
total number of participants served divided by a grantee's authorized 
number of positions, after adjusting for differences in minimum wage 
among the States and areas.
    (6) ``Most-in-need'' or the number of participating individuals 
described in Sec.518(a)(3)(B)(ii) or (b)(2) is defined by counting the 
total number of the following characteristics for all participants and 
dividing by the number of participants served. Participants are 
characterized as most-in-need if they:
    (i) Have a severe disability;
    (ii) Are frail;
    (iii) Are age 75 or older;
    (iv) Meet the eligibility requirements related to age for, but do 
not receive, benefits under title II of the Social Security Act (42 
U.S.C. 401 et seq.);
    (v) Live in an area with persistent unemployment and are individuals 
with severely limited employment prospects;
    (vi) Have limited English proficiency;
    (vii) Have low literacy skills;
    (viii) Have a disability;
    (ix) Reside in a rural area;
    (x) Are veterans;
    (xi) Have low employment prospects;
    (xii) Have failed to find employment after utilizing services 
provided under title I of the Workforce Investment Act of 1998 (29 
U.S.C. 2801 et seq.); or
    (xiii) Are homeless or at risk for homelessness.
    (b) The additional indicators are defined as follows:
    (1) ``Retention in unsubsidized employment for 1 year'' is defined 
by the formula: Of those who are employed in the first quarter after the 
exit quarter: The number of participants who are employed in the fourth 
quarter after the exit quarter divided by the number of participants who 
exit during the quarter.
    (2) ``Satisfaction of the participants, employers, and their host 
agencies with their experiences and the services provided'' is defined 
as the results of customer satisfaction surveys administered to each of 
these three customer groups. The Department will prescribe the content 
of the surveys.
    (3) ``Entry into volunteer work'' is defined by the formula: Of 
those not engaged in volunteer work at the time of entry into the SCSEP, 
the number of such participants who perform volunteer work in the first 
quarter after the exit quarter, divided by the number of such 
participants who exit during the quarter.

[75 FR 53812, Sept. 1, 2010, as amended at 77 FR 4661, Jan. 31, 2012]

    Effective Date Note: At 77 FR 4661, Jan. 31, 2012, in Sec.641.710 
paragraph (b)(3) was added. This paragraph contains information 
collection and recordkeeping requirements and will not become effective 
until approval has been given by the Office of Management and Budget.



Sec.641.720  How will the Department and grantees initially determine and
then adjust expected levels of performance for the core performance measures?

    (a) Initial agreement. Before the beginning of each Program Year, 
the Department and each grantee will undertake to agree upon expected 
levels of performance for each core indicator, except as provided in 
paragraph (b) of Sec.641.730.
    (1) As a first step in this process, the Department proposes a 
performance level for each core indicator, taking into account any 
statutory performance requirements, the need to promote continuous 
improvement in the program overall and in each grantee, the grantee's 
past performance, and the statutory adjustment factors articulated in 
paragraph (b) of this section.
    (2) A grantee may request a revision to the Department's initial 
performance level goal determination. The request must be based on data 
that supports the revision request. The data supplied by the grantee at 
this stage may concern the statutory adjustment factors articulated in 
paragraph (b) of this section, but is not limited to those factors; it 
is permissible for a grantee

[[Page 221]]

to supply data on ``other appropriate factors as determined by the 
Secretary.'' (OAA Sec.513(a)(2)(C)).
    (3) The Department may revise the performance level goal in response 
to the data provided. The Department then sets the expected levels of 
performance for the core indicators. At this point, agreement is reached 
by the parties and funds may be awarded. If a grantee does not agree 
with the offered expected level of performance, agreement is not reached 
and no funds may be awarded. A grantee may submit comments to the 
Department about the grantee's satisfaction with the expected levels of 
performance.
    (4) Funds may not be awarded under the grant until such agreement is 
reached.
    (5) At the conclusion of performance level negotiations with all 
grantees, the Department will make available for public review the final 
negotiated expected levels of performance for each grantee, including 
any comments submitted by the grantee about the grantee's satisfaction 
with the negotiated levels.
    (6) The minimum percentage for the expected level of performance for 
the entry into unsubsidized employment core indicator is:
    (i) 21 percent for Program Year 2007;
    (ii) 22 percent for Program Year 2008;
    (iii) 23 percent for Program Year 2009;
    (iv) 24 percent for Program Year 2010; and
    (v) 25 percent for Program Year 2011.
    (b) Adjustment during the Program Year. After the Department and 
grantees reach agreement on the core indicator levels, those levels may 
only be revised in response to a request from a grantee based on data 
supporting one or more of the following statutory adjustment factors:
    (1) High rates of unemployment or of poverty or of participation in 
the program of block grants to States for temporary assistance for needy 
families established under part A of title IV of the Social Security Act 
(42 U.S.C. 601 et seq.), in the areas served by a grantee, relative to 
other areas of the State involved or Nation.
    (2) Significant downturns in the economy of the areas served by the 
grantee or in the national economy.
    (3) Significant numbers or proportions of participants with one or 
more barriers to employment, including individuals described in Sec.
518(a)(3)(B)(ii) or (b)(2) of the 2006 OAA (most-in-need), served by a 
grantee relative to such numbers or proportions for grantees serving 
other areas of the State or Nation.
    (4) Changes in Federal, State, or local minimum wage requirements.
    (5) Limited economies of scale for the provision of community 
service employment and other authorized activities in the areas served 
by the grantee.



Sec.641.730  How will the Department assist grantees in the transition 
to the new core performance indicators?

    (a) General transition provision. As soon as practicable after July 
1, 2007, the Department will determine if a SCSEP grantee has, for 
Program Year 2006, met the expected levels of performance for the 
Program Year 2007. If the Department determines that the grantee failed 
to meet Program Year 2007 goals in Program Year 2006, the Department 
will provide technical assistance to help the grantee meet those 
expected levels of performance in Program Year 2007.
    (b) Exception for most-in-need for Program Year 2007. Because the 
2006 OAA Amendments expanded the list of most-in-need characteristics, 
neither the Department nor the grantees have sufficient data to set a 
goal for measuring performance. Accordingly, Program Year 2007 will be 
treated as a baseline year for the most-in-need indicator so that the 
grantees and the Department may collect sufficient data to set a 
meaningful goal for this measure for Program Year 2008.



Sec.641.740  How will the Department determine whether a grantee fails, 
meets, or exceeds the expected levels of performance for the core
indicators and what will be the consequences of failing to meet expected 
levels of performance?

    (a) Aggregate calculation of performance. Not later than 120 days 
after the end of each Program Year, the Department will determine if a 
national grantee has met the expected levels of performance (including 
any adjustments to such levels) by aggregating

[[Page 222]]

the grantee's core indicators. The aggregate is calculated by combining 
the percentage of goal achieved on each of the individual core 
indicators to obtain an average score. A grantee will fail to meet its 
performance measures when it is does not meet 80 percent of the agreed-
upon level of performance for the aggregate of all the core indicators. 
Performance in the range of 80 to 100 percent constitutes meeting the 
level for the core performance measures. Performance in excess of 100 
percent constitutes exceeding the level for the core performance 
measures.
    (b) Consequences--
    (1) National grantees. (i) If the Department determines that a 
national grantee fails to meet the expected levels of performance in a 
Program Year, the Department, after each year of such failure, will 
provide technical assistance and will require such grantee to submit a 
corrective action plan not later than 160 days after the end of the 
Program Year.
    (ii) The corrective action plan must detail the steps the grantee 
will take to meet the expected levels of performance in the next Program 
Year.
    (iii) Any national grantee that has failed to meet the expected 
levels of performance for 4 consecutive years (beginning with Program 
Year 2007) will not be allowed to compete in the subsequent grant 
competition, but may compete in the next grant competition after that 
subsequent competition.
    (2) State grantees. (i) If the Department determines that a State 
fails to meet the expected levels of performance, the Department, after 
each year of such failure, will provide technical assistance and will 
require the State to submit a corrective action plan not later than 160 
days after the end of the Program Year.
    (ii) The corrective action plan must detail the steps the State will 
take to meet the expected levels of performance in the next Program 
Year.
    (iii) If the Department determines that the State fails to meet the 
expected levels of performance for 3 consecutive Program Years 
(beginning with Program Year 2007), the Department will require the 
State to conduct a competition to award the funds allotted to the State 
under Sec.506(e) of the OAA for the first full Program Year following 
the Department's determination. The new grantee will be responsible for 
administering the SCSEP in the State and will be subject to the same 
requirements and responsibilities as had been the State grantee.
    (c) Evaluation. The Department will annually evaluate, publish and 
make available for public review, information on the actual performance 
of each grantee with respect to the levels achieved for each of the core 
indicators of performance, compared to the expected levels of 
performance, and the actual performance of each grantee with respect to 
the levels achieved for each of the additional indicators of 
performance. The results of the Department's annual evaluation will be 
reported to Congress.



Sec.641.750  Will there be performance-related incentives?

    The Department is authorized by Sec. Sec.502(e)(2)(B)(iv) and 
517(c)(1) of the 2006 OAA to use recaptured SCSEP funds to provide 
incentive awards. The Department will exercise this authority at its 
discretion.



                  Subpart H_Administrative Requirements



Sec.641.800  What uniform administrative requirements apply to
the use of SCSEP funds?

    (a) SCSEP recipients and sub-recipients must follow the uniform 
administrative requirements and allowable cost requirements that apply 
to their type of organization. (OAA Sec.503(f)(2)).
    (b) Governments, State, local, and Indian tribal organizations that 
receive SCSEP funds under grants or cooperative agreements must follow 
the common rule implementing OMB Circular A-102, ``Grants and 
Cooperative Agreements with State and Local Governments'' (10/07/1994) 
(further amended 08/29/1997), codified at 29 CFR part 97.
    (c) Nonprofit and commercial organizations, institutions of higher 
education, hospitals, other nonprofit organizations, and commercial 
organizations that receive SCSEP funds under grants or cooperative 
agreements must follow the common rule implementing

[[Page 223]]

OMB Circular A-110, codified at 29 CFR part 95.



Sec.641.803  What is program income?

    Program income, as described in 29 CFR 97.25 (State and local 
governments) and 29 CFR 95.2(bb) (non-profit and commercial 
organizations), is income earned by the recipient or sub-recipient 
during the grant period that is directly generated by an allowable 
activity supported by grant funds or earned as a result of the award of 
grant funds. Program income includes income earned from license fees and 
royalties for copyrighted material, patents, patent applications, 
trademarks, and inventions produced under an award. (See 29 CFR 95.24(e) 
(non-profit and commercial organizations) and 29 CFR 97.25(e) (State and 
local governments)). Costs of generating SCSEP program income may be 
deducted from gross income received by SCSEP recipients and sub-
recipients to determine SCSEP program income earned or generated 
provided these costs have not been charged to the SCSEP.



Sec.641.806  How must SCSEP program income be used?

    (a) SCSEP recipients that earn or generate program income during the 
grant period must add the program income to the Federal and non-Federal 
funds committed to the SCSEP and must use it to further the purposes of 
the program and in accordance with the terms and conditions of the grant 
award. Program income may only be spent during the grant period in which 
it was earned (except as provided for in paragraph (b)), as provided in 
29 CFR 95.24(a) (non-profit and commercial organizations) or 29 CFR 
97.25(g) (2) (State and local governments), as applicable.
    (b)(1) Except as provided for in paragraph (b)(2), recipients that 
continue to receive a SCSEP grant from the Department must spend program 
income earned from SCSEP-funded activities in the Program Year in which 
the earned income was received.
    (2) Any program income remaining at the end of the Program Year in 
which it was earned will remain available for expenditure in the 
subsequent Program Year only. Any program income remaining after the 
second Program Year must be remitted to the Department.
    (c) Recipients that do not continue to receive a SCSEP grant from 
the Department must remit unexpended program income earned during the 
grant period from SCSEP funded activities to the Department at the end 
of the grant period. These recipients have no obligation to the 
Department for program income earned after the end of the grant period.



Sec.641.809  What non-Federal share (matching) requirements apply to
the use of SCSEP funds?

    (a) The Department will pay no more than 90 percent of the total 
cost of activities carried out under a SCSEP grant. (OAA sec. 
502(c)(1)).
    (b) All SCSEP recipients, including Federal agencies if there is no 
statutory exemption, must provide or ensure that at least 10 percent of 
the total cost of activities carried out under a SCSEP grant (non-
Federal share of costs) consists of allowable costs paid for with non-
Federal funds, except as provided in paragraphs (e) and (f) of this 
section.
    (c) Recipients must determine the non-Federal share of costs in 
accordance with 29 CFR 97.24 for governmental units, or 29 CFR 95.23 for 
nonprofit and commercial organizations.
    (d) The non-Federal share of costs may be provided in cash, or in-
kind, or a combination of the two. (OAA Sec.502(c)(2)).
    (e) A recipient may not require a sub-recipient or host agency to 
provide non-Federal resources for the use of the SCSEP project as a 
condition of entering into a sub-recipient or host agency relationship. 
This does not preclude a sub-recipient or host agency from voluntarily 
contributing non-Federal resources for the use of the SCSEP project.
    (f) The Department may pay all of the costs of activities in an 
emergency or disaster project or a project in an economically distressed 
area. (OAA Sec.502(c)(1)(B)).

[[Page 224]]



Sec.641.812  What is the period of availability of SCSEP funds?

    (a) Except as provided in Sec.641.815, recipients must expend 
SCSEP funds during the Program Year for which they are awarded (July 1-
June 30). (OAA Sec.517(b)).
    (b) SCSEP recipients must ensure that no sub-agreement provides for 
the expenditure of any SCSEP funds before the start of the grant year, 
or after the end of the grant period, except as provided in Sec.
641.815.



Sec.641.815  May the period of availability be extended?

    SCSEP recipients may request in writing, and the Department may 
grant, an extension of the period during which SCSEP funds may be 
obligated or expended. SCSEP recipients requesting an extension must 
justify that an extension is necessary. (OAA Sec.517(b)). The 
Department will notify recipients in writing of the approval or 
disapproval of any such requests.



Sec.641.821  What audit requirements apply to the use of SCSEP funds?

    (a) Recipients and sub-recipients receiving Federal awards of SCSEP 
funds must follow the audit requirements in paragraphs (b) and (c) of 
this section that apply to their type of organization. As used here, 
Federal awards of SCSEP funds include Federal financial assistance and 
Federal cost-reimbursement contracts received directly from the 
Department or indirectly under awards by SCSEP recipients or higher-tier 
sub-recipients. (OAA Sec.503(f)(2)).
    (b) All governmental and nonprofit organizations that are recipients 
or sub-recipients must follow the audit requirements of OMB Circular A-
133. These requirements are codified at 29 CFR parts 96 and 99 and 
referenced in 29 CFR 97.26 for governmental organizations and in 29 CFR 
95.26 for institutions of higher education, hospitals, and other 
nonprofit organizations.
    (c)(1) The Department is responsible for audits of SCSEP recipients 
that are commercial organizations.
    (2) Commercial organizations that are sub-recipients under the SCSEP 
and that expend more than the minimum level specified in OMB Circular A-
133 ($500,000, for fiscal years ending after December 31, 2003) must 
have either an organization-wide audit or a program-specific financial 
and compliance audit conducted in accordance with OMB Circular A-133.



Sec.641.824  What lobbying requirements apply to the use of SCSEP funds?

    SCSEP recipients and sub-recipients must comply with the 
restrictions on lobbying codified in the Department's regulations at 29 
CFR part 93. (Also refer to Sec.641.850(c), ``Lobbying costs.'')



Sec.641.827  What general nondiscrimination requirements apply to the
use of SCSEP funds?

    (a) SCSEP recipients, sub-recipients, and host agencies are required 
to comply with the nondiscrimination provisions codified in the 
Department's regulations at 29 CFR parts 31 and 32 and the provisions on 
the equal treatment of religious organizations at 29 CFR part 2 subpart 
D.
    (b) Recipients and sub-recipients of SCSEP funds are required to 
comply with the nondiscrimination provisions codified in the 
Department's regulations at 29 CFR part 37 if:
    (1) The recipient:
    (i) Is a One-Stop partner listed in Sec.121(b) of WIA, and
    (ii) Operates programs and activities that are part of the One-Stop 
delivery system established under WIA; or
    (2) The recipient otherwise satisfies the definition of 
``recipient'' in 29 CFR 37.4.
    (c) Recipients must ensure that participants are provided 
informational materials relating to age discrimination and/or their 
rights under the Age Discrimination in Employment Act of 1975 that are 
distributed to recipients by the Department as required by Sec.
503(b)(3) of the OAA.
    (d) Questions about or complaints alleging a violation of the 
nondiscrimination requirements cited in this section may be directed or 
mailed to the Director, Civil Rights Center, U.S. Department of Labor, 
Room N-4123, 200 Constitution Avenue, NW., Washington, DC, 20210, for 
processing. (See Sec.641.910(d)).
    (e) The specification of any right or protection against 
discrimination in

[[Page 225]]

paragraphs (a) through (d) of this section must not be interpreted to 
exclude or diminish any other right or protection against discrimination 
in connection with a SCSEP project that may be available to any 
participant, applicant for participation, or other individual under any 
applicable Federal, State, or local laws prohibiting discrimination, or 
their implementing regulations.



Sec.641.833  What policies govern political patronage?

    (a) A recipient or sub-recipient must not select, reject, promote, 
or terminate an individual based on political services provided by the 
individual or on the individual's political affiliations or beliefs. In 
addition, as provided in Sec.641.827(b), certain recipients and sub-
recipients of SCSEP funds are required to comply with WIA 
nondiscrimination regulations in 29 CFR part 37. These regulations 
prohibit discrimination on the basis of political affiliation or belief.
    (b) A recipient or sub-recipient must not provide, or refuse to 
provide, funds to any sub-recipient, host agency, or other entity based 
on political affiliation.
    (c) SCSEP recipients must ensure that every entity that receives 
SCSEP funds through the recipient is applying the policies stated in 
paragraphs (a) and (b) of this section.



Sec.641.836  What policies govern political activities?

    (a) No project under title V of the OAA may involve political 
activities. SCSEP recipients must ensure compliance with the 
requirements and prohibitions involving political activities described 
in paragraphs (b) and (c) of this section.
    (b) State and local employees involved in the administration of 
SCSEP activities may not engage in political activities prohibited under 
the Hatch Act (5 U.S.C. chapter 15), including:
    (1) Seeking partisan elective office;
    (2) Using official authority or influence for the purpose of 
affecting elections, nominations for office, or fund-raising for 
political purposes. (5 U.S.C. 1502).
    (c) SCSEP recipients must provide all persons associated with SCSEP 
activities with a written explanation of allowable and unallowable 
political activities under the Hatch Act. A notice explaining these 
allowable and unallowable political activities must be posted in every 
workplace in which SCSEP activities are conducted. The Department will 
provide the form and content of the notice and explanatory material by 
administrative issuance. (OAA Sec.502(b)(l)(P)).
    (d) SCSEP recipients must ensure that:
    (1) No SCSEP participants or staff persons engage in partisan or 
nonpartisan political activities during hours for which they are being 
paid with SCSEP funds.
    (2) No participants or staff persons engage in partisan political 
activities in which such participants or staff persons represent 
themselves as spokespersons for the SCSEP.
    (3) No participants are employed or out-stationed in the offices of 
a Member of Congress, a State or local legislator, or on the staff of 
any legislative committee.
    (4) No participants are employed or out-stationed in the immediate 
offices of any elected chief executive officer of a State or unit of 
general government, except that:
    (i) Units of local government may serve as host agencies for 
participants, provided that their assignments are non-political; and
    (ii) While assignments may place participants in such offices, such 
assignments actually must be concerned with program and service 
activities and not in any way involved in political functions.
    (5) No participants are assigned to perform political activities in 
the offices of other elected officials. Placement of participants in 
such offices in non-political assignments is permissible, however, 
provided that:
    (i) SCSEP recipients develop safeguards to ensure that participants 
placed in these assignments are not involved in political activities; 
and
    (ii) These safeguards are described in the grant agreement and are 
approved by the Department and are subject to review and monitoring by 
the SCSEP recipient and by the Department.

[[Page 226]]



Sec.641.839  What policies govern union organizing activities?

    Recipients must ensure that SCSEP funds are not used in any way to 
assist, promote, or deter union organizing.



Sec.641.841  What policies govern nepotism?

    (a) SCSEP recipients must ensure that no recipient or sub-recipient 
hires, and no host agency serves as a worksite for, a person who works 
in a SCSEP community service assignment if a member of that person's 
immediate family is engaged in a decision-making capacity (whether 
compensated or not) for that project, subproject, recipient, sub-
recipient, or host agency. The Department may exempt worksites on Native 
American reservations and in rural areas from this requirement provided 
that adequate justification can be documented, such as that no other 
persons are eligible and available for participation in the program.
    (b) To the extent that an applicable State or local legal nepotism 
requirement is more restrictive than this provision, SCSEP recipients 
must ensure that the more restrictive requirement is followed.
    (c) For purposes of this section, ``immediate family'' means wife, 
husband, son, daughter, mother, father, brother, sister, son-in-law, 
daughter-in-law, mother- in-law, father-in-law, brother-in-law, sister-
in-law, aunt, uncle, niece, nephew, stepparent, stepchild, grandparent, 
or grandchild.



Sec.641.844  What maintenance of effort requirements apply to the
use of SCSEP funds?

    (a) A community service assignment for a participant under title V 
of the OAA is permissible only when specific maintenance of effort 
requirements are met.
    (b) Each project funded under title V:
    (1) Must not reduce the number of employment opportunities or 
vacancies that would otherwise be available to individuals not 
participating in the program;
    (2) Must not displace currently employed workers (including partial 
displacement, such as a reduction in the hours of non-overtime work, 
wages, or employment benefits);
    (3) Must not impair existing contracts or result in the substitution 
of Federal funds for other funds in connection with work that would 
otherwise be performed; and
    (4) Must not employ or continue to employ any eligible individual to 
perform the same work or substantially the same work as that performed 
by any other individual who is on layoff. (OAA Sec.502(b)(1)(G)).



Sec.641.847  What uniform allowable cost requirements apply to the use
of SCSEP funds?

    (a) General. Unless specified otherwise in this part or the grant 
agreement, recipients and sub-recipients must follow the uniform 
allowable cost requirements that apply to their type of organization. 
For example, a local government sub-recipient receiving SCSEP funds from 
a nonprofit organization must use the allowable cost requirements for 
governmental organizations in OMB Circular A-87. The Department's 
regulations at 29 CFR 95.27 (non-profit and commercial organizations) 
and 29 CFR 97.22 (State and local governments) identify the Federal 
principles for determining allowable costs that each kind of 
organization must follow. The applicable Federal principles for each 
kind of organization are described in paragraphs (b)(1) through (b)(5) 
of this section. (OAA Sec.503(f)(2)).
    (b) Allowable costs/cost principles. (1) Allowable costs for State, 
local, and Indian tribal government organizations must be determined 
under OMB Circular A-87, ``Cost Principles for State, Local and Indian 
Tribal Governments.''
    (2) Allowable costs for nonprofit organizations must be determined 
under OMB Circular A-122, ``Cost Principles for Non-Profit 
Organizations.''
    (3) Allowable costs for institutions of higher education must be 
determined under OMB Circular A-21, ``Cost Principles for Educational 
Institutions.''
    (4) Allowable costs for hospitals must be determined in accordance 
with appendix E of 45 CFR part 74, ``Principles for Determining Costs 
Applicable to Research and Development Under Grants and Contracts with 
Hospitals.''

[[Page 227]]

    (5) Allowable costs for commercial organizations and those nonprofit 
organizations listed in Attachment C to OMB Circular A-122 must be 
determined under the provisions of the Federal Acquisition Regulation 
(FAR), at 48 CFR part 31.



Sec.641.850  Are there other specific allowable and unallowable cost
requirements for the SCSEP?

    (a) Yes, in addition to the generally applicable cost principles in 
Sec.641.847(b), the cost principles in paragraphs (b) through (g) of 
this section apply to SCSEP grants.
    (b) Claims against the Government. For all types of entities, legal 
expenses for the prosecution of claims against the Federal Government, 
including appeals to an Administrative Law Judge, are unallowable.
    (c) Lobbying costs. In addition to the prohibition contained in 29 
CFR part 93, SCSEP funds must not be used to pay any salaries or 
expenses related to any activity designed to influence legislation or 
appropriations pending before the Congress of the United States or any 
State legislature. (See Sec.641.824).
    (d) One-Stop costs. Costs of participating as a required partner in 
the One-Stop delivery system established in accordance with Sec.134(c) 
of the WIA are allowable, provided that SCSEP services and funding are 
provided in accordance with the MOU required by the WIA and OAA Sec.
502(b)(1)(O), and costs are determined in accordance with the applicable 
cost principles. The costs of services provided by the SCSEP, including 
those provided by participants/enrollees, may comprise a portion or the 
total of a SCSEP project's proportionate share of One-Stop costs.
    (e) Building repairs and acquisition costs. Except as provided in 
this paragraph and as an exception to the allowable cost principles in 
Sec.641.847(b), no SCSEP funds may be used for the purchase, 
construction, or renovation of any building except for the labor 
involved in:
    (1) Minor remodeling of a public building necessary to make it 
suitable for use for project purposes;
    (2) Minor repair and rehabilitation of publicly used facilities for 
the general benefit of the community; and
    (3) Repair and rehabilitation by participants of housing occupied by 
persons with low incomes who are declared eligible for such services by 
authorized local agencies.
    (f) Accessibility and reasonable accommodation. Recipients and sub-
recipients may use SCSEP funds to meet their obligations under Sec.504 
of the Rehabilitation Act of 1973, as amended, and the Americans with 
Disabilities Act of 1990, as amended, and any other applicable Federal 
disability nondiscrimination laws, to provide physical and programmatic 
accessibility and reasonable accommodation/modifications for, and 
effective communications with, individuals with disabilities. (29 U.S.C. 
794).
    (g) Participants' benefit costs. Recipients and sub-recipients may 
use SCSEP funds for participant benefit costs only under the conditions 
set forth in Sec.641.565.



Sec.641.853  How are costs classified?

    (a) All costs must be classified as ``administrative costs'' or 
``programmatic activity costs.'' (OAA Sec.502(c)(6)).
    (b) Recipients and sub-recipients must assign participants' wage and 
benefit costs and other participant (enrollee) costs such as supportive 
services to the programmatic activity cost category. (See Sec.
641.864). When a participant's community service assignment involves 
functions whose costs are normally classified as administrative costs, 
compensation provided to the participants must be charged as 
programmatic activity costs instead of administrative costs, since 
participant wage and benefit costs are always charged to the 
programmatic activity cost category.



Sec.641.856  What functions and activities constitute administrative costs?

    (a) Administrative costs are that allocable portion of necessary and 
reasonable allowable costs of recipients and program operators that are 
associated with those specific functions identified in paragraph (b) of 
this section and that are not related to the direct provision of 
programmatic activities specified in Sec.641.864. These costs may

[[Page 228]]

be both personnel and non-personnel and both direct and indirect costs.
    (b) Administrative costs are the costs associated with:
    (1) Performing general administrative and coordination functions, 
including:
    (i) Accounting, budgeting, financial, and cash management functions;
    (ii) Procurement and purchasing functions;
    (iii) Property management functions;
    (iv) Personnel management functions;
    (v) Payroll functions;
    (vi) Coordinating the resolution of findings arising from audits, 
reviews, investigations, and incident reports;
    (vii) Audit functions;
    (viii) General legal services functions;
    (ix) Developing systems and procedures, including information 
systems, required for these administrative functions;
    (x) Preparing administrative reports; and
    (xi) Other activities necessary for general administration of 
government funds and associated programs.
    (2) Oversight and monitoring responsibilities related to 
administrative functions;
    (3) Costs of goods and services used for administrative functions of 
the program, including goods and services such as rental or purchase of 
equipment, utilities, office supplies, postage, and rental and 
maintenance of office space;
    (4) Travel costs incurred for official business in carrying out 
administrative activities or the overall management of the program;
    (5) Costs of information systems related to administrative functions 
(for example, personnel, procurement, purchasing, property management, 
accounting, and payroll systems) including the purchase, systems 
development, and operating costs of such systems and;
    (6) Costs of technical assistance, professional organization 
membership dues, and evaluating results obtained by the project involved 
against stated objectives. (OAA Sec.502(c)(4)).



Sec.641.859  What other special rules govern the classification of costs
as administrative costs or programmatic activity costs?

    (a) Recipients and sub-recipients must comply with the special rules 
for classifying costs as administrative costs or programmatic activity 
costs set forth in paragraphs (b) through (e) of this section.
    (b)(1) Costs of awards by recipients and program operators that are 
solely for the performance of their own administrative functions are 
classified as administrative costs.
    (2) Costs incurred by recipients and program operators for 
administrative functions listed in Sec.641.856(b) are classified as 
administrative costs.
    (3) Costs incurred by vendors and sub-recipients performing the 
administrative functions of recipients and program operators are 
classified as administrative costs. (See 29 CFR 99.210 for a discussion 
of factors differentiating sub-recipients from vendors.)
    (4) Except as provided in paragraph (b)(3) of this section, all 
costs incurred by all vendors, and only those sub-recipients below 
program operators, are classified as programmatic activity costs. (See 
29 CFR 99.210 for a discussion of factors differentiating sub-recipients 
from vendors.)
    (c) Personnel and related non-personnel costs of staff who perform 
both administrative functions specified in Sec.641.856(b) and 
programmatic services or activities must be allocated as administrative 
or programmatic activity costs to the benefiting cost objectives/
categories based on documented distributions of actual time worked or 
other equitable cost allocation methods.
    (d) The allocable share of indirect or overhead costs charged to the 
SCSEP grant are to be allocated to the administrative and programmatic 
activity cost categories in the same proportion as the costs in the 
overhead or indirect cost pool are classified as programmatic activity 
or administrative costs.
    (e) Costs of the following information systems including the 
purchase, systems development and operating (e.g., data entry) costs are 
charged to the programmatic activity cost category:

[[Page 229]]

    (1) Tracking or monitoring of participant and performance 
information;
    (2) Employment statistics information, including job listing 
information, job skills information, and demand occupation information; 
and
    (3) Local area performance information.



Sec.641.861  Must SCSEP recipients provide funding for the administrative 
costs of sub-recipients?

    (a) Recipients and sub-recipients must obtain funding for 
administrative costs to the extent practicable from non-Federal sources. 
(OAA Sec.502(c)(5)).
    (b) SCSEP recipients must ensure that sufficient funding is provided 
for the administrative activities of sub-recipients that receive SCSEP 
funding through the recipient. Each SCSEP recipient must describe in its 
grant application the methodology used to ensure that sub-recipients 
receive sufficient funding for their administrative activities. (OAA 
Sec.502(b)(1)(R)).



Sec.641.864  What functions and activities constitute programmatic
activity costs?

    Programmatic activity costs include, but are not limited to, the 
costs of the following functions:
    (a) Participant wages, such benefits as are required by law (such as 
workers' compensation or unemployment compensation), the costs of 
physical examinations, compensation for scheduled work hours during 
which a host agency is closed for a Federal holiday, and necessary sick 
leave that is not part of an accumulated sick leave program, except that 
no amounts provided under the grant may be used to pay the cost of 
pension benefits, annual leave, accumulated sick leave, or bonuses, as 
described in Sec.641.565;
    (b) Outreach, recruitment and selection, intake, orientation, 
assessment, and preparation and updating of IEPs;
    (c) Participant training, as described in Sec.641.540, which may 
be provided before commencing or during a community service assignment, 
and which may be provided at a host agency, in a classroom setting, or 
using other appropriate arrangements, which may include reasonable costs 
of instructors' salaries, classroom space, training supplies, materials, 
equipment, and tuition;
    (d) Subject to the restrictions in Sec.641.535(c), job placement 
assistance, including job development and job search assistance, job 
fairs, job clubs, and job referrals; and
    (e) Participant supportive services, to enable an individual to 
successfully participate in a SCSEP project, as described in Sec.
641.545. (OAA Sec.502(c)(6)(A)).



Sec.641.867  What are the limitations on the amount of SCSEP 
administrative costs?

    (a) Except as provided in paragraph (b), no more than 13.5 percent 
of the SCSEP funds received for a Program Year may be used for 
administrative costs.
    (b) The Department may increase the amount available for 
administrative costs to not more than 15 percent, in accordance with 
Sec.641.870. (OAA Sec.502(c)(3)).



Sec.641.870  Under what circumstances may the administrative cost
limitation be increased?

    (a) SCSEP recipients may request that the Department increase the 
amount available for administrative costs. The Department may honor the 
request if:
    (1) The Department determines that it is necessary to carry out the 
project; and
    (2) The recipient demonstrates that:
    (i) Major administrative cost increases are being incurred in 
necessary program components, such as liability insurance, payments for 
workers' compensation for staff, costs associated with achieving 
unsubsidized placement goals, and other operation requirements imposed 
by the Department;
    (ii) The number of community service assignment positions in the 
project or the number of minority eligible individuals participating in 
the project will decline if the amount available for paying the cost of 
administration is not increased; or
    (iii) The size of the project is so small that the amount of 
administrative costs incurred to carry out the project necessarily 
exceeds 13.5 percent of the grant amount. (OAA Sec.502(c)(3)).
    (b) A request by a recipient or prospective recipient for an 
increase in

[[Page 230]]

the amount available for administrative costs may be submitted as part 
of the grant application or as a separate submission at any time after 
the grant award.



Sec.641.873  What minimum expenditure levels are required for participant 
wages and benefits?

    (a) Except as provided in Sec.641.874 or in paragraph (c) of this 
section, not less than 75 percent of the SCSEP funds provided under a 
grant from the Department must be used to pay for wages and benefits of 
participants as described in Sec.641.864(a). (OAA Sec.502(c)(6)(B)).
    (b) A SCSEP recipient is in compliance with this provision if at 
least 75 percent of the total expenditure of SCSEP funds provided to the 
recipient was for wages and benefits, even if one or more sub-recipients 
did not expend at least 75 percent of their SCSEP sub-recipient award 
for wages and benefits.
    (c) A SCSEP grantee may submit to the Department a request for 
approval to use not less than 65 percent of the grant funds to pay wages 
and benefits under Sec.641.874.



Sec.641.874  What conditions apply to a SCSEP grantee request to use additional
funds for training and supportive service costs?

    (a) A grantee may submit to the Department a request for approval--
    (1) To use not less than 65 percent of the grant funds to pay the 
wages and benefits described in Sec.641.864(a);
    (2) To use the percentage of grant funds specified in Sec.641.867 
to pay for administrative costs as described in Sec.641.856;
    (3) To use the 10 percent of grant funds that would otherwise be 
devoted to wages and benefits under Sec.641.873 to provide participant 
training (as described in Sec.641.540(e)) and participant supportive 
services to enable participants to successfully participate in a SCSEP 
project (as described in Sec.641.545), in which case the grantee must 
provide (from the funds described in this paragraph) the wages for those 
individual participants who are receiving training from the funds 
described in this paragraph, but may not use the funds described in this 
paragraph to pay for any administrative costs; and
    (4) To use the remaining grant funds to provide participant 
training, job placement assistance, participant supportive services, and 
outreach, recruitment and selection, intake, orientation and assessment.
    (b) In submitting the request the grantee must include in the 
request--
    (1) A description of the activities for which the grantee will spend 
the grant funds described in paragraphs (a)(3) and (a)(4) of this 
section;
    (2) An explanation documenting how the provision of such activities 
will improve the effectiveness of the project, including an explanation 
of whether any displacement of eligible individuals or elimination of 
positions for such individuals will occur, information on the number of 
such individuals to be displaced and of such positions to be eliminated, 
and an explanation of how the activities will improve employment 
outcomes for the individuals served, based on the assessment conducted 
under Sec.641.535(a)(2); and
    (3) A proposed budget and work plan for the activities, including a 
detailed description of how the funds will be spent on the activities 
described in paragraphs (a)(3) and (a)(4) of this section.
    (c)(1) If a grantee wishes to amend an existing grant agreement to 
use additional funds for training and supportive service costs, the 
grantee must submit such a request not later than 90 days before the 
proposed date of implementation contained in the request. Not later than 
30 days before the proposed date of implementation, the Department will 
approve, approve as modified, or reject the request, on the basis of the 
information included in the request.
    (2) If a grantee submits a request to use additional funds for 
training and supportive service costs in the grant application, the 
request will be accepted and processed as a part of the grant review 
process.
    (d) Grantees may apply this provision to individual sub-recipients 
but need not provide this opportunity to all their sub-recipients.

[[Page 231]]



Sec.641.876  How will compliance with cost limitations and minimum
expenditure levels be determined?

    The Department will determine compliance by examining expenditures 
of SCSEP funds. The cost limitations and minimum expenditure level 
requirements must be met at the time all such funds have been expended 
or the period of availability of such funds has expired, whichever comes 
first.



Sec.641.879  What are the financial and performance reporting requirements 
for recipients?

    (a) In accordance with 29 CFR 97.41 (State and local governments) or 
29 CFR 95.52 (non-profit and commercial organizations), each SCSEP 
recipient must submit a SCSEP Financial Status Report (FSR, ETA Form 
9130) in electronic format to the Department via the Internet within 45 
days after the ending of each quarter of the Program Year. Each SCSEP 
recipient must also submit a final closeout FSR to the Department via 
the Internet within 90 days after the end of the grant period. The 
Department will provide instructions for the preparation of this report. 
(OAA Sec.503(f)(3)).
    (1) Financial data must be reported on an accrual basis, and 
cumulatively by funding year of appropriation. Financial data may also 
be required on specific program activities as required by the 
Department.
    (2) If the SCSEP recipient's accounting records are not normally 
kept on the accrual basis of accounting, the SCSEP recipient must 
develop accrual information through an analysis of the documentation on 
hand.
    (b) In accordance with 29 CFR 97.40 (State and local governments) or 
29 CFR 95.51 (non-profit and commercial organizations), each SCSEP 
recipient must submit updated data on participants (including data on 
demographic characteristics and data regarding the performance 
measures), host agencies, and employers in an electronic format 
specified by the Department via the Internet within 30 days after the 
end of each of the first three quarters of the Program Year, on the last 
day of the fourth quarter of the Program Year, and within 90 days after 
the last day of the Program Year. Recipients wishing to correct data 
errors or omissions for their final Program Year report must do so 
within 90 days after the end of the Program Year. The Department will 
generate SCSEP Quarterly Progress Reports (QPRs), as well as the final 
QPR, as soon as possible after receipt of the data. (OAA Sec.
503(f)(3)).
    (c) Each State agency receiving title V funds must annually submit 
an equitable distribution report of SCSEP positions by all recipients in 
the State. The Department will provide instructions for the preparation 
of this report. (OAA Sec.508).
    (d) In addition to the data required to be submitted under paragraph 
(b) of this section, each SCSEP recipient may be required to collect 
data and submit reports on the performance measures. See subpart G. The 
Department will provide instructions detailing these measures and how 
recipients must prepare this report.
    (e) In addition to the data required to be submitted under paragraph 
(b) of this section, each SCSEP recipient may be required to collect 
data and submit reports about the demographic characteristics of program 
participants. The Department will provide instructions detailing these 
measures and how recipients must prepare these reports.
    (f) Federal agencies that receive and use SCSEP funds under 
interagency agreements must submit project financial and progress 
reports in accordance with this section. Federal recipients must 
maintain the necessary records that support required reports according 
to instructions provided by the Department. (OAA Sec.503(f)(3)).
    (g) Recipients may be required to maintain records that contain any 
other information that the Department determines to be appropriate in 
support of any other reports that the Department may require. (OAA Sec.
503(f)(3)).
    (h) Grantees submitting reports that cannot be validated or verified 
as accurately counting and reporting activities in accordance with the 
reporting instructions may be treated as failing to submit reports, 
which may result in failing one of the responsibility tests outlined in 
Sec.641.430 and OAA Sec.514(d).

[[Page 232]]



Sec.641.881  What are the SCSEP recipient's responsibilities relating
to awards to sub-recipients?

    (a) Recipients are responsible for ensuring that all awards to sub-
recipients are conducted in a manner to provide, to the maximum extent 
practicable, full and open competition in accordance with the 
procurement procedures in 29 CFR 95.43 (non-profit and commercial 
organizations) and 29 CFR 97.36 (State and local governments).
    (b) The SCSEP recipient is responsible for all grant activities, 
including the performance of SCSEP activities by sub-recipients, and 
ensuring that sub-recipients comply with the OAA and this part. (See 
also OAA Sec.514(d) and Sec.641.430 of this part on responsibility 
tests).
    (c) Recipients must follow their own procedures for allocating funds 
to other entities. The Department will not grant funds to another entity 
on the recipient's behalf.
    (d)(1) National grantees that receive grants to provide services in 
an area where a substantial population of individuals with barriers to 
employment exists must, in selecting sub-recipients, give special 
consideration to organizations (including former national grant 
recipients) with demonstrated expertise in serving such individuals. 
(OAA Sec.514(e)(2)).
    (2) For purposes of this section, the term ``individuals with 
barriers to employment'' means minority individuals, Indian individuals, 
individuals with greatest economic need, and most-in-need individuals. 
(OAA Sec.514(e)(1)).



Sec.641.884  What are the grant closeout procedures?

    SCSEP recipients must follow the grant closeout procedures at 29 CFR 
97.50 (State and local governments) or 29 CFR 95.71 (non-profit and 
government organizations), as appropriate. The Department will issue 
supplementary closeout instructions to OAA title V recipients as 
necessary.



           Subpart I_Grievance Procedures and Appeals Process



Sec.641.900  What appeal process is available to an applicant that does 
not receive a grant?

    (a) An applicant for financial assistance under title V of the OAA 
that is dissatisfied because it was not awarded financial assistance in 
whole or in part may request that the Grant Officer provide an 
explanation for not awarding financial assistance to that applicant. The 
request must be filed within 10 days of the date of notification 
indicating that financial assistance would not be awarded. The Grant 
Officer must provide the protesting applicant with feedback concerning 
its proposal within 21 days of the protest. Applicants may appeal to the 
U.S. Department of Labor, Office of Administrative Law Judges (OALJ), 
within 21 days of the date of the Grant Officer's feedback on the 
proposal, or within 21 days of the Grant Officer's notification that 
financial assistance would not be awarded if the applicant does not 
request feedback on its proposal. The appeal may be for a part or the 
whole of the denied funding. This appeal will not in any way interfere 
with the Department's decisions to fund other organizations to provide 
services during the appeal period.
    (b) Failure to file an appeal within the 21 days provided in 
paragraph (a) of this section constitutes a waiver of the right to a 
hearing.
    (c) A request for a hearing under this section must state 
specifically those issues in the Grant Officer's notification upon which 
review is requested. Those provisions of the Grant Officer's 
notification not specified for review are considered resolved and not 
subject to further review.
    (d) A request for a hearing must be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, Suite 400 North, 800 K Street, NW., Washington, DC 
20001, with one copy to the Departmental official who issued the 
determination.
    (e) The decision of the ALJ constitutes final agency action unless, 
within 21 days of the decision, a party dissatisfied with the ALJ's 
decision, in

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whole or in part, has filed a petition for review with the 
Administrative Review Board (ARB) (established under Secretary's Order 
No. 2-96, published at 61 FR 19978, May 3, 1996), specifically 
identifying the procedure, fact, law, or policy to which exception is 
taken. The mailing address for the ARB is 200 Constitution Ave., NW., 
Room N5404, Washington, DC 20210. The Department will deem any exception 
not specifically urged to have been waived. A copy of the petition for 
review must be sent to the grant officer at that time. If, within 30 
days of the filing of the petition for review, the ARB does not notify 
the parties that the case has been accepted for review, then the 
decision of the ALJ constitutes final agency action. Any case accepted 
by the ARB must be decided within 180 days of acceptance. If not so 
decided, the decision of the ALJ constitutes final agency action.
    (f) The Rules of Practice and Procedures for Administrative Hearings 
Before the Office of Administrative Law Judges, at 29 CFR part 18, 
govern the conduct of hearings under this section, except that:
    (1) The appeal is not considered a complaint; and
    (2) Technical rules of evidence, such as the Federal Rules of 
Evidence and subpart B of 29 CFR part 18, will not apply to any hearing 
conducted under this section. However, rules designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination will be applied when the ALJ 
conducting the hearing considers them reasonably necessary. The 
certified copy of the administrative file transmitted to the ALJ by the 
official issuing the notification not to award financial assistance must 
be part of the evidentiary record of the case and need not be moved into 
evidence.
    (g) The ALJ should render a written decision no later than 90 days 
after the closing of the record.
    (h) The remedies available are provided in Sec.641.470.



Sec.641.910  What grievance procedures must grantees make available to
applicants, employees, and participants?

    (a) Each grantee must establish, and describe in the grant 
agreement, grievance procedures for resolving complaints, other than 
those described by paragraph (d) of this section, arising between the 
grantee, employees of the grantee, sub-recipients, and applicants or 
participants.
    (b) The Department will not review final determinations made under 
paragraph (a) of this section, except to determine whether the grantee's 
grievance procedures were followed, and according to paragraph (c) of 
this section.
    (c) Allegations of violations of Federal law, other than those 
described in paragraph (d) of this section, which are not resolved 
within 60 days under the grantee's procedures, may be filed with the 
Chief, Division of Adult Services, Employment and Training 
Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Washington, DC 20210. Allegations determined to be substantial and 
credible will be investigated and addressed.
    (d) Questions about, or complaints alleging a violation of, the 
nondiscrimination requirements of title VI of the Civil Rights Act of 
1964, Sec.504 of the Rehabilitation Act of 1973, Sec.188 of the 
Workforce Investment Act of 1998 (WIA), or their implementing 
regulations, may be directed or mailed to the Director, Civil Rights 
Center, U.S. Department of Labor, Room N-4123, 200 Constitution Avenue, 
NW., Washington, DC 20210. In the alternative, complaints alleging 
violations of WIA Sec.188 may be filed initially at the grantee level. 
See 29 CFR 37.71, 37.76. In such cases, the grantee must use complaint 
processing procedures meeting the requirements of 29 CFR 37.70 through 
37.80 to resolve the complaint.



Sec.641.920  What actions of the Department may a grantee appeal and what
procedures apply to those appeals?

    (a) Appeals from a final disallowance of costs as a result of an 
audit must be made under 29 CFR 96.63.
    (b) Appeals of suspension or termination actions taken on the 
grounds of

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discrimination are processed under 29 CFR 31 or 29 CFR 37, as 
appropriate.
    (c) Protests and appeals of decisions not to award a grant, in whole 
or in part, will be handled under Sec.641.900.
    (d) Upon a grantee's receipt of the Department's final determination 
relating to costs (except final disallowance of costs as a result of an 
audit, as described in paragraph (a) of this section), payment, 
suspension or termination, or the imposition of sanctions, the grantee 
may appeal the final determination to the Department's Office of 
Administrative Law Judges, as follows:
    (1) Within 21 days of receipt of the Department's final 
determination, the grantee may transmit by certified mail, return 
receipt requested, a request for a hearing to the Chief Administrative 
Law Judge, United States Department of Labor, Suite 400 North, 800 K 
Street, NW., Washington, DC 20001 with a copy to the Department official 
who signed the final determination.
    (2) The request for hearing must be accompanied by a copy of the 
final determination, and must state specifically those issues of the 
determination upon which review is requested. Those provisions of the 
determination not specified for review, or the entire determination when 
no hearing has been requested within the 21 days, are considered 
resolved and not subject to further review.
    (3) The Rules of Practice and Procedures for Administrative Hearings 
Before the Office of Administrative Law Judges, at 29 CFR part 18, 
govern the conduct of hearings under this section, except that:
    (i) The appeal is not considered as a complaint; and
    (ii) Technical rules of evidence, such as the Federal Rules of 
Evidence and subpart B of 29 CFR part 18, will not apply to any hearing 
conducted under this section. However, rules designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination will be applied when the 
Administrative Law Judge conducting the hearing considers them 
reasonably necessary. The certified copy of the administrative file 
transmitted to the Administrative Law Judge by the official issuing the 
final determination must be part of the evidentiary record of the case 
and need not be moved into evidence.
    (4) The Administrative Law Judge should render a written decision no 
later than 90 days after the closing of the record. In ordering relief, 
the ALJ may exercise the full authority of the Secretary under the OAA.
    (5) The decision of the ALJ constitutes final agency action unless, 
within 21 days of the decision, a party dissatisfied with the ALJ's 
decision, in whole or in part, has filed a petition for review with the 
ARB (established under Secretary's Order No. 2-96), specifically 
identifying the procedure, fact, law, or policy to which exception is 
taken. The mailing address for the ARB is 200 Constitution Ave., NW., 
Room N5404, Washington, DC 20210. The Department will deem any exception 
not specifically argued to have been waived. A copy of the petition for 
review must be sent to the grant officer at that time. If, within 30 
days of the filing of the petition for review, the ARB does not notify 
the parties that the case has been accepted for review, then the 
decision of the ALJ constitutes final agency action. Any case accepted 
by the ARB must be decided within 180 days of acceptance. If not so 
decided, the decision of the ALJ constitutes final agency action.



Sec.641.930  Is there an alternative dispute resolution process that 
may be used in place of an OALJ hearing?

    (a) Parties to a complaint that has been filed according to the 
requirements of Sec.641.920 (a), (c), and (d) may choose to waive 
their rights to an administrative hearing before the OALJ. Instead, they 
may choose to transfer the settlement of their dispute to an individual 
acceptable to all parties who will conduct an informal review of the 
stipulated facts and render a decision in accordance with applicable 
law. A written decision must be issued within 60 days after submission 
of the matter for informal review.
    (b) Unless the parties agree in writing to extend the period, the 
waiver of the right to request a hearing before the OALJ will 
automatically be revoked if a settlement has not been reached or a 
decision has not been

[[Page 235]]

issued within the 60 days provided in paragraph (a) of this section.
    (c) The decision rendered under this informal review process will be 
treated as the final agency decision.



PART 645_PROVISIONS GOVERNING WELFARE-TO-WORK GRANTS--Table of Contents



                       Subpart A_Scope and Purpose

Sec.
645.100 What does this part cover?
645.110 What are the purposes of the Welfare-to-Work program?
645.120 What definitions apply to this part?
645.125 What are the roles of the local and State governmental partners 
          in the governance of the WtW program?
645.130 What are the effective dates for the Welfare-to-Work 1999 
          Amendments?
645.135 What is the effective date for spending Federal Welfare-to-Work 
          formula funds on newly eligible participants and newly 
          authorized services?

        Subpart B_General Program and Administrative Requirements

645.200 What does this subpart cover?
645.210 What is meant by the terms ``entity'' and ``project'' in the 
          statutory phrase ``an entity that operates a project'' with 
          Welfare-to-Work funds?
645.211 How must Welfare-to-Work funds be spent by the operating entity?
645.212 Who may be served under the general eligibility and noncustodial 
          parent eligibility (primary eligibility) provision?
645.213 Who may be served as an individual in the ``other eligibles'' 
          (30 percent) provision?
645.214 How will Welfare-to-Work participant eligibility be determined?
645.215 What must a WtW operating entity that serves noncustodial parent 
          participants do?
645.220 What activities are allowable under this part?
645.221 For what activities and services must local boards use contracts 
          and vouchers?
645.225 How do Welfare-to-Work activities relate to activities provided 
          under TANF and other related programs?
645.230 What general fiscal and administrative rules apply to the use of 
          Federal funds?
645.233 What are the time limitations on the expenditure of Welfare-to-
          Work grant funds?
645.235 What types of activities are subject to the administrative cost 
          limit on Welfare-to-Work grants?
645.240 What are the reporting requirements for Welfare-to-Work 
          programs?
645.245 Who is responsible for oversight and monitoring of Welfare-to-
          Work grants?
645.250 What procedures apply to the resolution of findings arising from 
          audits, investigations, monitoring, and oversight reviews?
645.255 What nondiscrimination protections apply to participants in 
          Welfare-to-Work programs?
645.260 What health and safety provisions apply to participants in 
          Welfare-to-Work programs?
645.265 What safeguards are there to ensure that participants in 
          Welfare-to-Work employment activities do not displace other 
          employees?
645.270 What procedures are there to ensure that currently employed 
          workers may file grievances regarding displacement and that 
          Welfare-to-Work participants in employment activities may file 
          grievances regarding displacement, health and safety standards 
          and gender discrimination?

   Subpart C_Additional Formula Grant Administrative Requirements and 
                               Procedures

645.300 What constitutes an allowable match?
645.310 What assurances must a State provide that it will make the 
          required matching expenditures?
645.315 What actions are to be taken if a State fails to make the 
          required matching expenditures?

              Subpart D_State Formula Grant Administration

645.400 Under what conditions may the Governor request a waiver to 
          designate an alternate local administering agency?
645.410 What elements will the State use in distributing funds within 
          the State?
645.415 What planning information must a State submit in order to 
          receive a formula grant?
645.420 What factors will be used in measuring State performance?
645.425 What are the roles and responsibilities of the State(s) and 
          local boards or alternate administering agencies?
645.430 How does the Welfare-to-Work program relate to the One-Stop 
          system and Workforce Investment Act (WIA) programs?

[[Page 236]]

              Subpart E_Welfare-to-Work Competitive Grants

645.500 Who are eligible applicants for competitive grant funds?
645.510 What is the required consultation with the Governor?
645.515 What are the program and administrative requirements that apply 
          to both the formula grants and competitive grants?
645.520 What are the application procedures and timeframes for 
          competitive grant funds?
645.525 What special consideration will be given to rural areas and 
          cities with large concentrations of poverty?

                 Subpart F_Administrative Appeal Process

645.800 What administrative remedies are available under this Part?

    Authority: 42 U.S.C. 603 (a)(5)(C)(viii).

    Source: 66 FR 2711, Jan. 11, 2001, unless otherwise noted.



                       Subpart A_Scope and Purpose



Sec.645.100  What does this part cover?

    (a) Subpart A establishes regulatory provisions that apply to the 
Welfare-to-Work (WtW) programs conducted at the State and at the local 
area levels.
    (b) Subpart B provides general program requirements applicable to 
all WtW formula and competitive funds. The provisions of this subpart 
govern how WtW funds must be spent, who is eligible to participate in 
the program, allowable activities and their relationship to TANF, 
Governor's projects for long-term recipients, administrative and fiscal 
provisions, and program oversight requirements. This subpart also 
addresses worker protections and the establishment of a State grievance 
system.
    (c) Subpart C sets forth additional administrative standards and 
procedures for WtW Formula Grants, such as matching requirements and 
reallotment procedures.
    (d) Subpart D sets forth the conditions under which the Governor may 
request a waiver to designate an alternate administering agency, sets 
forth the formula elements that must be included in the within-State 
distribution formula, the submission of a State annual plan, the factors 
for measuring State performance, and the roles and responsibilities of 
the States and the local boards or alternate administering agencies.
    (e) Subpart E outlines general conditions and requirements for the 
WtW Competitive Grants.
    (f) Subpart F sets forth the administrative appeals process.
    (g) Regulatory provisions applicable to the Indian and Native 
American Welfare-to-Work Program (INA WtW) are found at 20 CFR part 646.



Sec.645.110  What are the purposes of the Welfare-to-Work Program?

    The purposes of the WtW program are:
    (a) To facilitate the placement of hard-to-employ welfare recipients 
and certain noncustodial parents into transitional employment 
opportunities which will lead to lasting unsubsidized employment and 
self-sufficiency;
    (b) To provide a variety of activities, grounded in TANF's ``work 
first'' philosophy, to prepare individuals for, and to place them in, 
lasting unsubsidized employment;
    (c) To provide for a variety of post-employment and job retention 
services which will assist the hard-to-employ welfare recipient and 
certain noncustodial parents to secure lasting unsubsidized employment;
    (d) To provide targeted WtW funds to high poverty areas with large 
numbers of hard-to-employ welfare recipients.



Sec.645.120  What definitions apply to this part?

    The following definitions apply under this part:
    Act means Title IV, Part A of the Social Security Act, 42 U.S.C. 
601-619.
    Adult means an individual who is not a minor child.
    Chief Elected Official(s) (CEOs) means:
    (1) The chief elected official of the sole unit of general local 
government in the service delivery area,
    (2) The individual or individuals selected by the chief elected 
officials of all units of general local government in such area as their 
authorized representative, or
    (3) In the case of a service delivery area designated under section 
101(a)(4)(A)(iii) of JTPA, the representative of the chief elected 
official for

[[Page 237]]

such area (as defined in section 4(4)(C) of JTPA) or as defined in 
section 101 of the Workforce Investment Act of 1988.
    Competitive grants means those grants in which WtW funds have been 
awarded by the Department under a competitive application process to 
local governments, PICs, and private entities (such as community 
development corporations, community-based and faith-based organizations, 
disability community organizations, and community action agencies) who 
apply in conjunction with a PIC or local government.
    Department or DOL means the U.S. Department of Labor.
    Employment activities means the activities enumerated at Sec.
645.220(b).
    ETA means the Employment and Training Administration of the U.S. 
Department of Labor.
    Fiscal year (FY) means any 12-month period ending on September 30 of 
a calendar year.
    Formula grants means those grants in which WtW funds have been 
allotted to each Welfare-to-Work State, based on a formula prescribed by 
the Act, which equally considers States' shares of the national number 
of poor individuals and of adult recipients of assistance under TANF. 
The State is required to distribute not less than 85 percent of the 
allotted formula grant funds to service delivery areas in the State; and 
the State may retain not more than 15 percent for projects to help long-
term recipients of assistance enter unsubsidized employment. Unless 
otherwise specified, the term ``formula grant'' refers to the 85 percent 
and 15 percent funds.
    Governor means the Chief Executive Officer of a State.
    IV-D Agency (Child Support Enforcement) means the organizational 
unit in the State that has the responsibility for administering or 
supervising the administration of the State plan under title IV-D of the 
Act (SSA).
    Job Training Partnership Act or JTPA means Public Law (Pub. L.) 97-
300, as amended, 29 U.S.C. 1501, et seq.
    Local area means a local workforce investment area designated under 
section 116 of the Workforce investment Act of 1998, or a service 
delivery area designated under section 101 of the Job Training 
partnership Act, as appropriate.
    Local workforce investment board (local board) means a local board 
established under section 117 of the Workforce Investment Act, or a 
Private Industry Council established under section 102 of the Job 
Training Partnership Act (JTPA), which performs the functions authorized 
at section 103 of the JTPA, or an alternate administering agency 
designated under section 405(a)(5)(A)(vii)(II) of the Act and Sec.
645.400 of this part.
    Minor child means an individual who has not attained 18 years of 
age, or has not attained 19 years of age and is a full-time student in a 
secondary school (or in the equivalent level of vocational or technical 
training).
    MOE means maintenance of effort. Under TANF, States are required to 
maintain a certain level of spending on welfare based on ``historic'' FY 
1994 expenditure levels (Section 409(a)(7) of the Act).
    PIC means a Private Industry Council established under Section 102 
of the Job Training Partnership Act, which performs the functions 
authorized at Section 103 of the JTPA.
    Political subdivision of a State means a unit of general purpose 
local government, as provided for in State laws and/or Constitution, 
which has the power to levy taxes and spend funds and which also has 
general corporate and police powers.
    Private entity means any organization, public or private, which is 
not a local board, PIC or alternate administering agency or a political 
subdivision of a State.
    PRWORA means the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, Public Law (Pub. L.) 104-193, which 
established the TANF program.
    SDA means a service delivery area designated under section 101 of 
the Job Training Partnership Act or a local area designated under 
section 116 of the Workforce Investment Act of 1998, as appropriate.
    Secretary means the Secretary of Labor.
    Separate State program means a program operated outside of TANF in

[[Page 238]]

which the expenditures of State funds may count for TANF MOE purposes.
    State means the 50 States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the US Virgin Islands, Guam, 
and American Samoa, unless otherwise specified.
    State TANF Program means those funds expended under the State Family 
Assistance Grant (SFAG), the basic block grant allocated to the States 
under Section 403(a)(1) of the Act.
    TANF means Temporary Assistance for Needy Families Program 
established under PRWORA.
    TANF MOE means the expenditure of State funds that must be made in 
order to meet the Temporary Assistance for Needy Families Maintenance of 
Effort requirement.
    Unemployed means the individual is without a job and wants and is 
available for work.
    WIA means the Workforce Investment Act of 1998 (Pub. L. 105-220)(29 
U.S.C. 2801 et seq.).
    WtW means Welfare-to-Work.
    WtW State means those States that the Secretary of Labor determines 
have met the five conditions established at Section 403(a)(5)(A)(ii) of 
the Act. Only States that are determined to be WtW States can receive 
WtW grant funds.
    WtW statute means those provisions of the Balanced Budget Act of 
1997 containing certain amendments to PRWORA and establishing the new 
Welfare-to-Work program, amending Title IV of the Social Security Act, 
(codified at 42 U.S.C. 601-619).



Sec.645.125  What are the roles of the local and State governmental
partners in the governance of the WtW program?

    (a) Local boards or alternate administering agencies, in 
coordination with CEO's should establish policies, interpretations, 
guidelines and definitions to implement provisions of the WtW statute to 
the extent that such policies, interpretations, guidelines and 
definitions are not inconsistent with the WtW statute or regulations or 
with State policies.
    (b) States should establish policies, interpretations, guidelines 
and definitions to implement provisions of the WtW statute to the extent 
that such policies, interpretations, guidelines and definitions are not 
inconsistent with the WtW statute or regulations.
    (c) The Secretary, in consultation with other Federal Agencies, as 
appropriate, may publish guidance on interpretations of statutory and 
regulatory provisions. State and local policies, interpretations, 
guidelines and definitions that are consistent with interpretations 
contained in such guidance will be considered to be consistent with the 
WtW statute for purposes of this section.



Sec.645.130  What are the effective dates for the Welfare-to-Work
1999 Amendments?

    The legislative changes made by the 1999 amendments:
    (a) Are effective on November 29, 1999, except as provided in 
paragraphs (b) and (c) of this section;
    (b) Provisions relating to the eligibility of participants for WtW 
competitive grants are effective on January 1, 2000;
    (c)(1) Provisions relating to the eligibility of participants for 
WtW formula grants are effective on July 1, 2000, except that 
expenditures from allotments to the States, as discussed in Sec.
645.135 of this subpart, must not have been made before October 1, 2000, 
for individuals who would not have been eligible under the criteria in 
effect before the changes made by the 1999 Amendments;
    (2) Provisions authorizing pre-placement vocational educational 
training and job training for WtW formula grants, at Sec.645.220(b) of 
this part, are effective on July 1, 2000, except that expenditures from 
allotments to the States, as discussed in Sec.645.135 of this subpart, 
must not have been made before October 1, 2000.



Sec.645.135  What is the effective date for spending Federal 
Welfare-to-Work formula funds on newly eligible participants and newly
authorized services?

    States and local areas may expend matching funds beginning July 1, 
2000. States and local areas may incur unpaid obligations within the 
normal course of business, beginning July 1, 2000, provided that the 
timing of those transactions ensures that drawdown of

[[Page 239]]

federal Welfare-to-Work formula funds to liquidate the obligations did 
not occur until October 1, 2000.



        Subpart B_General Program and Administrative Requirements



Sec.645.200  What does this subpart cover?

    This subpart provides general program and administrative 
requirements for WtW formula funds, including Governors' funds for long-
term recipients of assistance, and for competitive grant funding 
(section 403(a)(5)).



Sec.645.210  What is meant by the terms ``entity'' and ``project'' in the
statutory phrase ``an entity that operates a project'' with 
Welfare-to-Work funds?

    The terms ``entity'' and ``project'', in the statutory phrase ``an 
entity that operates a project'', means:
    (a) For WtW substate formula funds:
    (1) ``Entity'' means the PIC, local board (or the alternate 
administering agency designated by the Governor and approved by the 
Secretary pursuant to Sec.645.400 of this part) which administers the 
WtW substate formula funds in a local area(s). This entity is referred 
to in Sec. Sec.645.211 through 645.225 of this part as the ``operating 
entity.''
    (2) ``Project'' means all activities, administrative and 
programmatic, supported by the total amount of the WtW substate formula 
funds allotted to the entity described in section (a)(1) of this 
paragraph.
    (b) For WtW Governors' funds for long-term recipients of assistance:
    (1) ``Entity'' means the agency, group, or organization to which the 
Governor has distributed any of the funds for long-term recipients of 
assistance, as described in Sec.645.410 (b) and (c) of this part. This 
entity is referred to in Sec. Sec.645.211 through 645.225 of this part 
as the ``operating entity.''
    (2) ``Project'' means all activities, administrative and 
programmatic, supported by the total amount of one discrete award of WtW 
Governors' funds for long-term recipients of assistance awarded to the 
entity described in section (b)(1) of this paragraph.
    (c) For competitive WtW funds:
    (1) ``Entity'' means an eligible applicant, as described in Sec.
645.500 of this part, which is awarded a competitive WtW grant. This 
entity is referred to in Sec. Sec.645.211 through 645.225 of this part 
as the ``operating entity.''
    (2) ``Project'' means all of the activities, administrative and 
programmatic, supported by the total amount of one discrete WtW 
competitive grant awarded to the entity described in section (c)(1) of 
this paragraph (section 403(a)(5)(C)).



Sec.645.211  How must Welfare-to-Work funds be spent by the operating entity?

    An operating entity, as described in Sec.645.210 of this subpart, 
may spend not more than 30 percent of the WtW funds allotted to or 
awarded to the operating entity to assist individuals who meet the 
``other eligibles'' eligibility requirements under Sec.645.213 of this 
subpart. The remaining funds allotted to or awarded to the operating 
entity are to be spent to benefit individuals who meet the ``general 
eligibility'' and/or ``noncustodial parents'' eligibility requirements, 
under Sec.645.212 of this subpart. (section 403(a)(5)(C) of the Act).



Sec.645.212  Who may be served under the general eligibility and
noncustodial parent eligibility (primary eligibility) provision?

    An individual may be served under this provision if:
    (a)(1) (S)he is currently receiving TANF assistance under a State 
TANF program, and/or its predecessor program, for at least 30 months, 
although the months do not have to be consecutive; or
    (2) (S)he will become ineligible for assistance within 12 months due 
to either Federal or State-imposed time limits on the receipt of TANF 
assistance. This criterion includes individuals (as well as children of 
noncustodial parents) exempted from the time limits due to hardship 
under section 408(a)(7)(C) of the Act or due to a waiver because of 
domestic violence under section 402(a)(7) of the Act, who would become 
ineligible for assistance within 12 months without the exemption or 
waiver;

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    (b) (S)he is no longer receiving TANF assistance because (s)he has 
reached either the Federal five-year limit or a State-imposed time limit 
on receipt of TANF assistance (section 403(a)(5)(C) of the Act); or
    (c) (S)he is a noncustodial parent of a minor child if:
    (1) The noncustodial parent is:
    (i) ``Unemployed,'' as defined in Sec.645.120 of this part,
    (ii) ``Underemployed,'' as defined by the State in consultation with 
local boards and WtW competitive grantees, or
    (iii) ``Having difficulty paying child support obligations,'' as 
defined by the State in consultation with local boards and WtW 
competitive grantees and the State Child Support Enforcement (IV-D) 
Agency, and
    (2) At least one of the following applies:
    (i) The minor child, or the custodial parent of the minor child, 
meets the long-term recipient of TANF requirements of paragraph (a) of 
this section;
    (ii) The minor child is receiving or is eligible for TANF benefits 
and services;
    (iii) The minor child received TANF benefits and services during the 
preceding year; or
    (iv) The minor child is receiving or eligible for assistance under 
the Food Stamp program, the Supplemental Security Income program, 
Medicaid, or the Children's Health Insurance Program; and
    (3) The noncustodial parent is in compliance with the terms of a 
written or oral personal responsibility contract meeting the 
requirements of Sec.645.215 of this subpart.
    (d) For purposes of determining whether an individual is receiving 
TANF assistance in paragraphs (a)(1) of this section and Sec.
645.213(a), TANF assistance means any TANF benefits and services for the 
financially needy according to the appropriate income and resource 
criteria (if applicable) specified in the State TANF plan.



Sec.645.213  Who may be served as an individual in the ``other eligibles'' 
(30 percent) provision?

    Any individual may be served under this provision if (s)he:
    (a) Is currently receiving TANF assistance (as described in Sec.
645.212(d)) and either:
    (1) Has characteristics associated with, or predictive of, long-term 
welfare dependence, such as having dropped out of school, teenage 
pregnancy, or having a poor work history. States, in consultation with 
the operating entity, may designate additional characteristics 
associated with, or predictive, of long term-welfare dependence; or
    (2) Has significant barriers to self-sufficiency, under criteria 
established by the local board or alternate administering agency.
    (b) Was in foster care under the responsibility of the State before 
s(he) attained 18 years of age and is at least 18 but not 25 years of 
age or older at the time of application for WtW. Eligible individuals 
include those who were recipients of foster care maintenance payments as 
defined in section 475(4) under part E of the Social Security Act, or
    (c)(1) Is a custodial parent with income below 100 percent of the 
poverty line, determined in accordance with the most recent HHS Poverty 
Guidelines established under section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981 (Pub. L. 97-35), including any revisions 
required by such section, applicable to a family of the size involved.
    (2) For purposes of paragraph (c)(1) of this section, income is 
defined as total family income for the last six months, exclusive of 
unemployment compensation, child support payments, and old-age and 
survivors benefits received under section 202 of the Social Security Act 
(42 U.S.C. 402).
    (3) A custodial parent with a disability whose own income meets the 
requirements of a program described in paragraph (c)(1) or (c)(3)(i) but 
who is a member of a family whose income does not meet such requirements 
is considered to have met the requirements of paragraph (c)(1) of this 
section.



Sec.645.214  How will Welfare-to-Work participant eligibility
be determined?

    (a) The operating entity, as described in Sec.645.210(a)(1), 
(b)(1), and (c)(1) of this

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subpart, is accountable for ensuring that WtW funds are spent only on 
individuals eligible for WtW projects.
    (b) The operating entity must ensure that there are mechanisms in 
place to determine WtW eligibility for individuals who are receiving 
TANF assistance. These mechanisms:
    (1) Must include arrangements with the TANF agency to ensure that a 
WtW eligibility determination is based on information, current at the 
time of the WtW eligibility determination, about whether an individual 
is receiving TANF assistance, the length of receipt of TANF assistance, 
and when an individual may become ineligible for assistance, pursuant to 
Sec. Sec.645.212 and 645.213 of this part (section 
403(a)(5)(I)(A)(ii)(dd)).
    (2) May include a determination of WtW eligibility for 
characteristics of long-term welfare dependence and for significant 
barriers to self-sufficiency under Sec.645.213(a) of this subpart, 
based on information collected by the operating entity and/or the TANF 
agency up to six months prior to the WtW eligibility determination.
    (c) The operating entity must ensure that there are mechanisms in 
place to determine WtW eligibility for individuals who have reached the 
time limit on receipt of TANF, under Sec.645.212(b) of this subpart; 
individuals who are not receiving TANF assistance (i.e., noncustodial 
parents under Sec.645.212(c) of this subpart; individuals who are 
former foster care recipients under Sec.645.213(b) of this subpart, 
and low-income custodial parents under Sec.645.213(c) of this 
subpart). The mechanisms for establishing noncustodial parent 
eligibility must include a process for applying the preference required 
under Sec.645.215(a) of this subpart, and may include an objective 
standard to be used as a presumptive determination for establishing the 
eligibility of the minor child for the programs specified in Sec.
645.212(c)(2)(iv) of this subpart.



Sec.645.215  What must a WtW operating entity that serves noncustodial
parent participants do?

    (a) In programs that serve noncustodial parents, the operating 
entity must give preference to those noncustodial parents who qualify 
under Sec.645.212(c)(2)(i) of this subpart over other noncustodial 
parents. The preference for admission into the program applies only to 
noncustodial parents and not to any other group eligible under the 
``general eligibility'' provisions of Sec.645.212(a) or (b) or the 
``other eligibles'' provisions of Sec.645.213. The preference does not 
require that the category of noncustodial parents eligible under Sec.
645.212(c)(2)(i) must be exhausted before any other category of eligible 
noncustodial parents may be served. The operating entity may establish a 
process that gives preference to noncustodial parents eligible under 
Sec.645.212(c)(2)(i) and that also provides WtW services to 
noncustodial parents eligible under the other provisions of Sec.
645.212(c)(2).
    (b) In order to protect custodial parents and children who may be at 
risk of domestic violence, the operating entity must consult with 
domestic violence prevention and intervention organizations in the 
development of its WtW project serving noncustodial parents; and must 
not require the cooperation of the custodial parent as a condition of 
participation in the WtW program for either parent; and
    (c) The operating entity must ensure that personal responsibility 
contracts:
    (1) Take into account the employment and child support status of the 
noncustodial parent;
    (2) Include all of the following parties:
    (i) The noncustodial parent,
    (ii) The operating entity, and
    (iii) The agency responsible for administering the State Child 
Support Enforcement program as described under Title IV-D of the Act, 
unless the operating entity demonstrates to the Secretary of Labor with 
written documentation that it is not able to coordinate with the State 
IV-D agency;
    (3) Include the following elements:
    (i) A commitment by the noncustodial parent to cooperate:
    (A) In the establishment of paternity (if the participant is male) 
of the minor child at the earliest opportunity, through voluntary 
acknowledgment or other procedures, and
    (B) In the establishment of a child support order;

[[Page 242]]

    (ii) A commitment by the noncustodial parent to cooperate in the 
payment of child support for the minor child. This commitment may 
include a modification of an existing support order to take into 
account:
    (A) The ability of the noncustodial parent to pay such support; and
    (B) The participation of the noncustodial parent in the WtW program, 
and
    (iii) A commitment by the noncustodial parent to participate in 
employment or related activities that will enable the noncustodial 
parent to make regular child support payments. For noncustodial parents 
who have not reached 20 years of age, such activities may include:
    (A) Completion of high school,
    (B) Earning a general equivalency degree, or
    (C) Participating in other education directly related to employment;
    (iv) A description of the services to be provided to the 
noncustodial parent under the WtW program;
    (4) Contain a commitment by the noncustodial parent to participate 
in the services that are described in the personal responsibility 
contract under paragraph (c)(3)(iv) of this section; and
    (5) Be entered into no later than thirty (30) days after the 
individual is enrolled in and is receiving services through a WtW 
project funded under this part, unless the operating entity has 
determined that good cause exists to extend this period. This extension 
may not extend to a date more than ninety (90) days after the individual 
is enrolled in and receiving services through a WtW project funded under 
this part.



Sec.645.220  What activities are allowable under this part?

    Entities operating WtW projects may use WtW funds for the following:
    (a) Job readiness activities, subject to the requirements of Sec.
645.221 of this subpart.
    (b) Vocational educational training or job training. A participant 
is limited to six calendar months of such training if (s)he is not also 
employed or participating in an employment activity, as described in 
paragraph (c) of this section.
    (c) Employment activities which consist of any of the following:
    (1) Community service programs;
    (2) Work experience programs;
    (3) Job creation through public or private sector employment wage 
subsidies; and
    (4) On-the-job training.
    (d) Job placement services subject to the requirements of Sec.
645.221 of this subpart.
    (e) Post-employment services which are provided after an individual 
is placed in one of the employment activities listed in paragraph (c) of 
this section, or in any other subsidized or unsubsidized job, subject to 
the requirements of Sec.645.221 of this subpart. Post-employment 
services include such services as:
    (1) Basic educational skills training;
    (2) Occupational skills training;
    (3) English as a second language training; and
    (4) Mentoring.
    (f) Job retention services and support services that are provided 
after an individual is placed in a job readiness activity, as specified 
in paragraph (a) of this section; in vocational education or job 
training, as specified in paragraph (b) of this section; in one of the 
employment activities, as specified in paragraph (c) of this section, or 
in any other subsidized or unsubsidized job. WtW participants who are 
enrolled in Workforce Investment Act (WIA) or JTPA activities, such as 
occupational skills training, may also receive job retention and support 
services funded with WtW monies while they are participating in WIA 
activities. Job retention and support services can be provided with WtW 
funds only if they are not otherwise available to the participant. Job 
retention and support services include such services as:
    (1) Transportation assistance;
    (2) Substance abuse treatment (except that WtW funds may not be used 
to provide medical treatment);
    (3) Child care assistance;
    (4) Emergency or short term housing assistance; and
    (5) Other supportive services.
    (g) Individual development accounts which are established in 
accordance with the Act.

[[Page 243]]

    (h) Outreach, recruitment, intake, assessment, eligibility 
determination, development of an individualized service strategy, and 
case management may be incorporated in the design of any of the 
allowable activities listed in paragraphs (a) through (g) of this 
section (section 403(a)(5)(C) of the Act).



Sec.645.221  For what activities and services must local boards use 
contracts or vouchers?

    (a) Local boards and PIC's must provide the following activities and 
services through vouchers or contracts with public or private providers: 
the job readiness activities described in Sec.645.220(a) of this 
subpart, the job placement services described in Sec.645.220(d) of 
this subpart, and the post-employment services described in Sec.
645.220(e) of this subpart. Job placement services provided with 
contracts or vouchers are subject to the payment requirements at Sec.
645.230(a)(3) of this subpart. If an operating entity is not a local 
board or a PIC, it may provide such services directly.
    (b) Local boards and PIC's which are directly providing job 
readiness activities or job placement and/or post-employment services 
must conform to the requirement in paragraph (a) of this section, to 
provide such services through contract or voucher, by February 12, 2001.



Sec.645.225  How do Welfare-to-Work activities relate to activities provided 
through TANF and other related programs?

    (a) Activities provided through WtW must be coordinated effectively 
at the State and local levels with activities being provided through 
TANF (section 403(a)(5)(A)(vii)(II)).
    (b) The operating entity must ensure that there is an assessment of 
skills, prior work experience, employability, and other relevant 
information in place for each WtW participant. Where appropriate, the 
assessment performed by the TANF agency or JTPA should be used for this 
purpose.
    (c) The operating entity must ensure that there is an individualized 
strategy for transition to unsubsidized employment in place for each 
participant which takes into account participant assessments, including 
the TANF assessment and any JTPA assessment. Where appropriate, the TANF 
individual responsibility plan (IRP), a WIA individual employment plan, 
or a JTPA individual service strategy should be used for this purpose.
    (d) Coordination of resources should include not only those 
available through WtW and TANF grant funds, and the Child Care and 
Development Block Grant, but also those available through oth