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U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20213

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TURL

ISSUE DATE

March 11, 1980

RESCISSIONS

 

EXPIRATION DATE

February 28, 1981

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 22-80

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

OFFICE OF THE DEPUTY ASSISTANT SECRETARY

ROBERTS T. JONES LEWIS
Administrator
Office of Management Assistance

 

SUBJECT

:

Coverage of Agricultural or Domestic Service Performed for State or Local Government Entities or Nonprofit Organizations

 

  1. Purpose. To advise State agencies of the applicability of the size-of-firm limitations on required coverage of service performed in agricultural labor or domestic work to such service when performed for State or local government entities or nonprofit organizations.

  2. Reference. Sections 3304(a)(6)(A), 3306(c), 3309(a)(1), FUTA; P.L.94-566 and P.L. 96-84.

  3. Background. Prior to January 1, 1978, the Federal Unemployment Tax Act did not provide coverage of agricultural labor. Section 3306(c)(1)(A), FUTA, was amended by P.L. 94-566 and P.L. 96-84 to include as "employment" agricultural labor if such service is performed for a person who-

    "(i)  during any calendar quarter in the calendar year or preceding calendar year paid remuneration in cash of $20,000 or more to individuals employed in agricultural labor (including labor performed by an alien referred to in subparagraph (B)), or

    "(ii)  on each of some 20 days during the calendar year or the preceding calendar year, each day being in a different calendar week, employed in agricultural labor (including labor performed by an alien referred to in subparagraph (B)) for some portion of the day (whether or not at the same moment of time) 10 or more individuals . . ."

    (Note: Prior to the amendments made by P.L. 96-84, effective January 1, 1980, service performed by an alien referred to in section 3306(c)(1)(B), FUTA, was not required to be covered and was not required to be taken into account in determining whether the size of firm provisions of section 3306(c)(1)(A)(i) and (ii) were met. P.L. 96-84 extended the exemption from coverage of alien agricultural labor until January 1, 1982, but required consideration of such service in determining size of firm beginning January 1, 1980.)

    Prior to January 1, 1978, the Federal Unemployment Tax Act did not provide coverage of domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. Section 3306(c)(2), FUTA, was amended by P.L. 94-566 to include as "employment" such service performed after December 31, 1977, if the person for whom the service was performed--

    ". . . paid cash remuneration of $1,000 or more to individuals employed in such domestic service in any calendar quarter in the calendar year or the preceding calendar year . . ."

    P.L. 94-566 also amended sections of the FUTA to require that State laws provide, as a condition for certification of the States, for coverage of services performed for State and local government entities and certain nonprofit organizations. Specific exceptions from the requirement for such coverage of such services are listed in section 3306(c), paragraphs (1) through (6) and (9) through (17), FUTA, and section 3309(b), FUTA. In addition, section 3309(c), FUTA, limits the requirement for coverage of services performed for a nonprofit organization to service in the employ of an organization which had 4 or more employees in employment on each of 20 days during the calendar year or the preceding calendar year, each day being in a different week.

  4. Interpretation. The question has been raised as to whether, in determining the liability for coverage of a government entity or nonprofit organization, the size-of-firm limitations on agricultural labor and domestic service in section 3306(c)(1) and (2), FUTA, may be taken into account. The answer is yes. The following examples are offered:

  5. Action Required. State Administrators are requested to provide the above information to the appropriate staff. SESAs may wish to review the coverage provisions in their unemployment insurance laws in light of the explanation provided above.

  6. Inquiries. Questions should be directed to the appropriate regional office.