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U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEURL

ISSUE DATE

August 6, 1993

RESCISSIONS

None

EXPIRATION DATE

August 31, 1994

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 36-93

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

BARBARA ANN FARMER
Administrator
for Regional Management

 

SUBJECT

:

Training Under the Job Training Partnership Act as "Approved Training" For Unemployment Compensation Purposes

 

  1. Purpose. To inform State Employment Security Agencies (SESAs) that certain individuals participating in training under the Job Training Partnership Act (JTPA) are considered to be in approved training under Section 3304(a)(8), Federal Unemployment Tax Act (FUTA).

  2. References. Section 314(f), JTPA, as amended by Section 301 of P.L. 102-367 (The Job Training Reform Amendments of 1992), and Section 3304(a)(8), FUTA.

  3. Background. Section 3304(a)(8), FUTA, requires, as a condition for employers in a State to receive normal credit against the Federal tax, that a State's unemployment compensation (UC) law provide that:

    compensation shall not be denied to an individual for any week because he is in training with the approval of the State agency (or because of the application, to any such week in training, of State law provisions relating to availability forwork, active search for work, or refusal to accept work). . . .

    Title III, JTPA, contains certain employment and training provisions specifically related to dislocated workers. In its original enactment (Public Law (P.L.) 97-300), JTPA included a provision which the Department of Labor (Department) interpret- ed as requiring that acceptance of training under Title III, JTPA, was to be considered approved training under Section 3304(a)(8), FUTA. The reauthorization of JTPA (P.L. 99-496)did not include a similar provision; however, Department regulations at 20 CFR 631.4 (1992) imposed such a requirement. The recently enacted P.L. 102-367, the Job Training Reform Amendments of 1992, again included such a provision related to approved training. Specifically, Section 301(2) of P.L. 102-367 added new Section 314(f)(2) to JTPA. This section provides:

    An eligible dislocated worker participating in training (except for on-the-job training) under this title [i.e., Title III] shall be deemed to be in training with the approval of the State agency for purposes of section 3304(a)(8) of the Internal Revenue Code of 1986 [i.e., Section 3304(a)(8), FUTA].

    This provision is implemented in regulations at 20 CFR 631.4 (57 Fed. Reg. 62004, 62063).

  4. Discussion. Section 3304(a)(8), FUTA, requires a State to allow an individual in an approved training course to receive UC and to prohibit denial based on State law provisions relating to availability for work, active search for work, or refusal of work. Ordinarily, each State is free to determine whether training is appropriate for a claimant, to establish the criteria for approval of a training course, and to adopt safeguards to assure that the claimant is actually attending approved training. Section 314(f)(2), JTPA, however, preempts State agency discretion to approve training in one area. A State must consider training under Title III of JTPA to be "approved" training within the meaning of Section 3304(a)(8), FUTA.

    This amendment to JTPA applies only to those individuals actually participating in training under Title III, JTPA. It does not apply to individuals who are merely enrolled, accepted in, or planning to attend such training. Nor, by its terms, does it apply to on-the-job training. States do, however, have the option of considering whether individuals participating in training under other titles of JTPA are in "approved" training.

    Section 3304(a)(8), FUTA, prohibits the denial of compensation to a trainee in an approved training course based on State law requirements relating to availability for work, active search for work, or refusal of work. However, an individual participating in training under Title III, JTPA, who does not meet other State UC eligibility requirements is not entitled to UC. For example, Title III, JTPA, permits individuals who have exhausted their compensation to participate in training programs. These individuals remain ineligible for UC because of State law regarding exhaustion of compensation, despite participation in training under Title III, JTPA. Individuals must satisfy all other basic State law requirements for eligibility, such as establishing sufficient qualifying wages or showing good cause for voluntarily leaving employment. These requirements are not waived by any provision of JTPA or FUTA.

  5. Effective Date. Under Section 701(a) of P.L. 102-367, the amendments made by such act "shall take effect on July 1, 1993" except as otherwise provided. Since no other provision designates an effective date for Section 314(f), it is effective July 1, 1993.

  6. Action Required. States should review their laws to assure that individuals participating in training (except for on-the-job training) under Title III, JTPA, are in "approved" training under State laws.

  7. Inquiries. Direct inquiries to the appropriate Regional Office.

  8. Attachments. None