[Federal Register Volume 63, Number 71 (Tuesday, April 14, 1998)]
[Notices]
[Pages 18230-18231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9830]
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DEPARTMENT OF LABOR
Employment and Training Administration
Federal-State Unemployment Compensation Program: Unemployment
Insurance Program Letter Interpreting Federal Unemployment Insurance
Law
The Employment and Training Administration interprets Federal law
requirements pertaining to unemployment compensation (UC) as part of
its role in the administration of the Federal-State UC program. These
interpretations are issued in Unemployment Insurance Program Letters
(UIPLs) to the State Employment Security Agencies. The UIPL described
below is published in the Federal Register in order to inform the
public.
UIPL 18-98
The Department of Labor (DOL) has noticed that some States treat
the ``between seasons'' denial involving athletic services in the same
manner as the ``between and within terms'' denial involving educational
services. UIPL 18-98 explains the differences between these two
sections of the Federal Unemployment Tax Act (FUTA) and advises the
States of DOL's position on when UC is payable on athletic services.
Under the between seasons denial provision, DOL interpreted FUTA as
requiring States to deny UC to athletes on the basis of any services
where ``substantially all'' of the services performed by the individual
during the base period are based on athletically-related services. If
``substantially all'' of the services have been performed in athletics,
and a reasonable assurance of participating in athletics in the later
season exists, then none of the wages may be used to establish
eligibility and all UC must be denied. Conversely, if the
``substantially all'' test has not been met, the use of all wages for
both athletic services and other services, is permissible to determine
eligibility for UC. Under the between and within terms denial
provision, DOL interpreted FUTA as requiring that UC not be paid based
on certain educational services between and within academic periods
under certain conditions. The denial requirement under this provision
of FUTA pertains only to UC based on educational, and not athletic,
services.
Dated: April 8, 1998.
Raymond J. Uhalde,
Acting Assistant Secretary of Labor.
U.S. Department of Labor
Employment and Training Administration, Washington, D.C. 20210
CLASSIFICATION: UI
CORRESPONDENCE SYMBOL: TEUL
DATE: March 30, 1998
DIRECTIVE: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 18-98
TO: ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM: GRACE A. KILBANE, Director, Unemployment Insurance Service
SUBJECT: Use of Services Performed by Professional Athletes Between
Seasons
1. Purpose. To remind States of the Department of Labor's
(DOL's) position concerning how services performed by professional
athletes (``athletes'') are used in determining eligibility for
unemployment compensation (UC).
2. References. Section 3304(a), Federal Unemployment Tax Act
(FUTA); Draft Language and Commentary to Implement the Unemployment
Compensation Amendments of 1976--P.L. 94-566 (``1976 Draft
Language'') and Supplements 1-5; Employment and Training
Administration (ETA) Handbook 301; Unemployment Insurance Program
Letter (UIPL) No. 43-80, dated May 23, 1980.
3. Background. As a result of implementing its new method of
measuring nonmonetary performance, DOL has discovered that some
States treat the ``between seasons'' denial involving athletic
services in the same manner as the ``between and within terms''
denial involving educational services. Although there are
similarities in the language of these laws, the applications are
different. As a result, DOL is issuing this UIPL to remind the
States of its position on when UC is not payable on athletic
services and to explain the differences between the two sections.
4. The Between Seasons Denial. Section 3304(a)(13), FUTA,
requires, as a condition of employers in a State receiving credit
against the Federal unemployment tax, that--
Compensation shall not be payable to any individual on the basis
of any services, substantially all of which consist of participating
in sports or athletic events or training or preparing to so
participate, for any week which commences during the period between
two successive sport seasons (or similar periods) if such individual
performed services in the first of such seasons (or similar periods)
and there is a reasonable assurance that such individual will
perform such services in the later of such seasons (or similar
periods). [Emphasis added.]
The Department, thus, interpreted FUTA as requiring States to
deny UC to athletes on the basis of any services where
``substantially all'' of the services performed by the individual
during the base period are based on athletically-related services.
(See page 22, of Supplement 1, to the 1976 Draft Language.) To
determine whether ``substantially all'' of the services were
athletically-related, all services (athletic and non-athletic) must
be considered together. If ``substantially all'' of the services
have been performed in athletics, and a reasonable assurance that
the individual will participate in athletics in the later season
exists, then none of the wages may be used to establish eligibility,
and all UC must be denied. Conversely, if the ``substantially all''
test has not been met, then FUTA permits the use of all wages to
determine eligibility for UC.
Concerning what constitutes ``substantially all,'' DOL has
previously stated that, at a minimum, ``an individual shall be
deemed to have performed substantially all services in such sports
or athletic events if the individual engaged in such sports or
athletic events for 90 percent or more of the total time spent in
the base period in the performance of all covered services.'' (See
page 22, of Supplement 1, to the 1976 Draft Language.)
The definition of ``substantially all'' as 90 percent as a basis
for denial of athletic services under Section 3304(a)(13), FUTA, is
a minimum requirement. FUTA does not prohibit a more stringent
denial. Therefore, a State may enact a law to deny benefits between
seasons if the amount of time spent in athletic services was less
than 90 percent of the total time spent in the performance of all
services in the base period. (1976 Draft Language, Supplement 4,
page 11.) For example, a State may choose to deny an athlete if only
80 percent or more of the total time in the base period was spent
participating in athletic services.
Finally, a State may also deny benefits to athletes between
sport seasons where there is no reasonable assurance.
5. The Between and Within Terms Denial. Section 3304(a)(6)(A),
FUTA, requires that UC not be paid based on certain educational
services between and within periods under certain conditions. This
denial pertains only to UC based on educational services. It does
not apply to UC based on any other covered employment.
As noted in UIPL 34-80, ``since compensation is based only on
base period employment, the denial must apply only to the amount of
benefits based on school service performed in the base period. An
individual who has participated in the labor force in a capacity
other than as a school employee cannot be denied benefit entitlement
based on the non-school work simply because of also being a school
employee.''
Thus, an unemployed individual who performed services for an
educational employer and also performed services for a non-
educational employer could receive reduced UC during the summer
based on the non-educational employment (even if a reasonable
assurance of school employment in the next school term exists). The
denial would apply only to that portion of benefits based on
educational employment during the base period.
Also, unlike the athletic services provision, the States may not
apply a stricter denial to educational services.
[[Page 18231]]
6. Reasonable Assurance. Reasonable assurance in the ``between
seasons'' denial for athletic services is used in a different manner
than in the ``between and within terms'' denial for educational
services. For the professional athlete, a mere indication of his/her
intent to participate in the subsequent sports season without any
verification from any sports organization can constitute
``reasonable assurance.'' (See page 56, of the 1976 Draft Language.)
However, the term ``reasonable assurance,'' as it applies to
educational employees under the ``between and within terms'' denial,
must be verified by the educational institution before it can be
established as a fact. (See page 54, of the 1976 Draft Language and
page 17, Supplement 1, to the 1976 Draft Language).
7. Action Required. Administrators are to provide this
information to appropriate staff.
8. Inquiries. Inquiries should be directed to the appropriate
Regional Office.
[FR Doc. 98-9830 Filed 4-13-98; 8:45 am]
BILLING CODE 4510-30-M