EMPLOYMENT AND TRAINING ADMINISTRATION
U.S. DEPARTMENT OF LABOR
Washington, D. C. 20210
August 16, 1994
August 31, 1995
|ADVISORY||:||UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 41-94|
|TO||:||ALL STATE EMPLOYMENT SECURITY AGENCIES|
|FROM||:||MARY ANN WYRSCH
Unemployment Insurance Service
|SUBJECT||:||Unemployment Insurance Program Requirements for the Worker Profiling and Reemployment Services System|
Purpose. To provide guidance on Unemployment Insurance (UI) program requirements for the Worker Profiling and Reemployment Services system.
Laws. Title III of the Social Security Act (SSA); Section 4 of Public Law (P.L.) 103-152; the Federal-State Extended Unemployment Compensation Act of 1970 (EUCA); 5 U.S.C. 8501 et seq.; and Title III of the Job Training Partnership Act (JTPA), "Employment and Training Assistance for Dislocated Workers."
Issuances. Unemployment Insurance Program Letter (UIPL) No. 13-94, dated January 28, 1994; UIPL 13-94, Change 1, dated April 15, 1994; and the Secretary's Standard for Claim Determinations, Part V, Employment Security Manual, Section 6010 et seq.
Background. On November 24, 1993, the President signed into law the Unemployment Compensation Amendments of 1993 (P.L. 103-152) which added Sections 303(a)(10) and 303(j) to the SSA. Both of these new sections contain requirements States must meet as a condition of States receiving UI grants. (The text of both sections is contained in the Attachment.) Under Section 303(j)(1), SSA, the State must:
Identify which claimants will be likely to exhaust regular UI and will need job search assistance services to make a successful transition to new employment. (Subparagraph (A) of Section 303(j)(1), SSA.)
Refer the claimants so identified to reemployment services, such as job search assistance services, available under any State or Federal law. (Subparagraph (B) of Section 303(j)(1), SSA.)
Collect follow-up information relating to the services received by such claimants and their employment outcomes and use the information for future profiling. (Subparagraph (C) of Section 303(j)(1), SSA.)
Meet "such other requirements as the Secretary of Labor determines are appropriate." (Subparagraph (D) of Section 303(j)(1), SSA.)
In addition, Section 303(a)(10), SSA, requires claimants to participate in reemployment services to which they have been referred as a condition of UI eligibility. P.L. 103-152 requires the Secretary of Labor to provide technical assistance and advice to the States in implementing the worker profiling systems.
One of the principal aims of the profiling system is to provide reemployment services to certain claimants through an "early intervention" process. That is, claimants who are unlikely to return to their previous jobs or occupations will be identified and given assistance early in their claims series. This approach is expected to facilitate an early return to employment and savings to each State's unemployment fund.
In response to this legislation, the U.S. Department of Labor (Department) has launched a major initiative to establish an integrated, comprehensive worker profiling and reemployment services system involving various programs, including the UI, Employment Service, and Title III, JTPA programs. To this end, information describing how a recommended integrated system might operate was issued to the States through the Department's Regional Offices. (This recommended system followed the overall approach embodied in the proposed Reemployment Act of 1994.) However, since the SSA amendments create specific requirements as a condition of receiving UI administrative grants, it is necessary to provide guidance to States concerning what actions must be taken concerning the UI program. This issuance provides definitive guidance concerning these actions.
Among other things, this UIPL describes the minimum required profiling system for identifying and referring claimants. That the States must use this required profiling system does not, however, abridge the States' authority to use other methods, not related to the minimum system, for identifying claimants for referral. For example, assuming a service provider has twenty-five slots, a State may refer only fifteen claimants identified under the minimum required profiling system to the provider if the State also refers ten claimants using whatever methods it deems appropriate.
Overview of Profiling and Reemployment Services System. Federal law does not specify a detailed structure for the profiling and reemployment services system. That is left to the States. However, in order to meet the statutory requirements and coordinate between the various employment and training programs, the Department anticipates that the following general structure will be used by all States:
The UI agency will profile all claimants to identify those likely to exhaust regular UI and in need of reemployment services.
To the extent that reemployment services are available, the "identified" claimants will either be immediately referred to these services or placed in a selection pool from which a referral may later be made.
Services will begin with an orientation session advising claimants of the availability and benefit of reemployment services, and, if appropriate, an individual assessment of each claimant's needs. Based on an individual service plan, the claimant may be referred to reemployment services tailored to the individual's needs.
The entity providing the reemployment services will promptly provide the UI agency with any necessary information relating to the claimants' continuing eligibility for UI.
Arrangements with Service Provider(s). Under the authority granted by Section 303(j)(1)(D), SSA, which allows the Secretary to establish other requirements as are deter-mined appropriate, the Department has determined that State UI agencies are to establish certain arrangements with the entities providing reemployment services. When the UI agency is not part of the same overall State agency as the service provider (for example, an employment security agency or executive department), the Department recommends that these arrangements be in a written agreement. Arrangements must be made in two areas: the number of claimants to be referred to the provider and the information the provider must forward to the UI agency.
Number of Claimants Referred. The burden of reporting to service providers should not be placed upon claimants when services are not available. Similarly, service providers should not be required to expend time and resources working with referred claimants when services are not available for them. Therefore, there must be a balance between the available supply of services and referrals to these services. To avoid excessive referrals, the agreement must provide a method for assuring that the number of claimants referred to the provider is based on the number the provider is able to serve.
Section 303(j)(1)(B), SSA, only requires the referral to "available" reemployment services of claimants identified as likely to exhaust regular UI and who need job search assistance. Therefore, the State will meet the requirements of Section 303(j)(1)(B), SSA, when the supply of services and referrals to these services is balanced.
Receipt of Information. New Section 303(a)(10), SSA, requires that claimants, identified and referred to reemployment services through profiling, participate in such services, or in similar services, as a condition of UI eligibility. Also, Section 303(a)(1), SSA, requires "methods of administration . . . as are found by the Secretary to be reasonably calculated to insure full payment of unemployment compensation when due." This means the UI agency must have methods of administration for obtaining eligibility information from service providers and for promptly determining eligibility based on this information. To ensure service providers meet the UI agency's needs, arrangements must exist for the prompt provision of any necessary eligibility information concerning participation or availability. States also will need to establish methods of administration for obtaining this information when claimants are attending "similar services" as discussed in item 11.b.
Further, as discussed in item 12 below, States must provide information to this Department related to reemployment services received by claimants and employment outcomes. Arrangements must be made for the provision of this information.
Definition of "Reemployment Services". The second conference report for P.L. 103-152, which added Sections 303(a)(10) and 303(j) to the SSA, describes "reemployment services" as including--
job search assistance and job placement services, such as counseling, testing, and providing occupational and labor market information, assessment, job search workshops, job clubs and referrals to employers, and other similar services. [H.R. Conf. Rep. No. 404, 103rd Cong., 1st Sess. 5 (1993)]
Reemployment services need not include skills and education training. Therefore, States are not required to apply the participation requirement discussed in item 11.a. to such training even if claimants are referred to such training through the worker profiling and reemployment services system.
Orientation and assessment activities are both reemployment services for purposes of Sections 303(a)(10) and 303(j), SSA. Orientation is a service since claimants are made aware of why services are available and what the services are and, as a result, are able to participate in the identification of appropriate services to assist them in returning to employment. Assessment is a service since it identifies the specific needs of each claimant. Assessment is also listed as a reemployment service in the Committee Report.
Benefit Rights Interview (BRI). Under the Secretary's Standard for Claim Determinations, individuals who may be entitled to UI must be provided information as will reasonably afford them an opportunity to know, establish and protect their rights under the UI law of the State. Therefore, BRI information provided to claimants during the initial claims taking process must advise claimants of the possible consequences of failure to report or to participate in any reemployment services to which they may be referred.
Identifying Claimants Likely to Exhaust and in Need of Reemployment Services.
Who is to be Profiled. Section 303(j)(1)(A), SSA, requires that State agencies establish and utilize a system of profiling "all new claimants for regular compensation" (i.e., regular UI) that "identifies which claimants will be likely to exhaust regular compensation and will need job search assistance services to make a successful transition to new employment." Based on the plain language of Section 303(j)(1)(A), all claimants for regular UI must be profiled.
The term "regular compensation" is defined in Section 205(2), EUCA, as "compensation payable to an individual under any State unemployment compensation law (including compensation payable pursuant to 5 U.S.C. chapter 85), . . . other than extended compensation and additional compensation. Through the reference to 5 U.S.C. chapter 85, the phrase "all new claimants for regular compensation" includes claimants filing for UI for ex-servicemembers (UCX) and Federal employees (UCFE). The phrase "all new claimants for regular compensation" includes all intrastate, interstate and combined-wage claimants.
The Department will work with the States in developing arrangements for profiling interstate claimants. In determining whether to take action against a State which is not profiling and referring interstate claimants, the Department will take into account the feasibility of such State taking appropriate action.
Who is to be Identified. The profiling system must be structured so as to identify which claimants will be likely to exhaust regular UI and will need job search assistance services to make a successful transition to new employment. If a claimant is not permanently laid off, there is no need for job search assistance to make a "transition to new employment" and the likelihood of exhaustion also decreases. Similarly, if jobs exist in the current industry or occupation, then the claimant is less likely to exhaust and to need job search assistance to make a "transition to new employment." The word "transition" as used in Section 303(j)(1), SSA, indicates that the requirement for participation in reemployment services is not aimed at claimants who are merely between jobs in the same industry or occupation, but instead at claimants who are having to make a "transition" to jobs in a different industry or occupation.
As a result of this analysis, the Department has determined the following minimum requirement: A State profiling system must identify all new claimants for regular UI who are permanently laid off (and who are, therefore, likely to exhaust). From the claimants so identified, the State must further identify at least one of the following: (1) those claimants who are unlikely to return to their previous industry or (2) those claimants who are unlikely to return to their previous occupation.
Claimants identified under the minimum required profiling system described above will also be "eligible dislocated workers" under Section 303(a)(1)(A) of Title III, JTPA. This section defines the term "eligible dislocated workers" to mean individuals who "have been terminated or laid off or who have received a notice of termination or layoff from employment, are eligible for or have exhausted their entitlement to unemployment compensation, and are unlikely to return to their previous industry or occupation." Claimants identified through the minimum profiling system described above are--as are certain "eligible dislocated workers"--permanently laid off from employment, eligible for UI, and unlikely to return to their previous industry or occupation. Therefore, claimants identified through the minimum required profiling system will also be "eligible dislocated workers" for purposes of Title III, JTPA.
How Claimants are to be Identified.
(1) Variables. The use of certain types of variables is required to ensure that claimants identified are permanently laid off and unlikely to return to their previous industry or occupation. The use of other variables is optional. In addition, the use of certain variables is prohibited.
Under the minimum required profiling system, the following variables must be used:
First Payment for Total or Part-Total Unemployment: Since claimants cannot exhaust UI unless they are first eligible for UI, the use of this variable is required. Claimants receiving first payments for partial claims are not required to be identified for referral since there has been no separation from employment.
First payment to some claimants will occur late in their claims series due to appeals, wage investi-gations or other causes. Since, as noted in item 8.a, "all new claimants" for UI must be profiled, claimants receiving late payments must be profiled. However, given that the profiling system's goal of early intervention will not be achieved for these claimants, States have the option of introducing an additional variable to the profiling system which would exclude claimants who receive first payments after a certain period of time (for example, 5 weeks).
Recall Status: Since claimants who are on recall will not need reemployment services and are less likely to exhaust UI, the use of this variable is required.
Hiring Halls: Claimants making exclusive use of a union hiring hall will not need reemployment services since these claimants are expecting to find work in their current occupation. If union hiring halls are used in the State, then the State must use this variable.
Claimants remaining after these three variables are applied will be passed through either a statistical modeling or characteristic screening process to determine difficulty in finding reemployment. (See item 8.c.(2) below.) Following are variables which the Department has identified for use in this process:
Education: Educational level is closely associated with reemployment difficulty. Generally, claimants with less education are more likely to exhaust. Use of this variable is a State option.
Job Tenure: This is a measure of a claimant's attachment to a specific employer. Studies show that the longer a worker's specific job attachment, the more difficult it is to find equivalent employment elsewhere. Use of this variable is a State option.
Industry: A claimant's search for employment is affected by the former industry of employment. Claimants who worked in industries that are declining, relative to others in the State, experience greater difficulty in obtaining new employment than claimants who worked in expanding industries. States must use either this variable or "occupation."
Occupation: Workers in low demand occupations experience greater reemployment difficulty than workers in occupations with higher demand. States must use either this variable or "industry."
Unemployment Rate: Dislocation and reemployment difficulty are closely related to economic condi-tions, as measured by unemployment rates. In areas with high unemployment, unemployed workers will have greater difficulty becoming reemployed than those workers in areas with low unemployment, even if all other conditions are equal. Use of this variable is a State option.
To summarize, under the minimum required profiling system, States must use first payment, recall status, hiring halls (if they are used in the State), and either industry or occupation to identify claimants for purposes of referral to reemployment services. Using the above optional variables will decrease the number identified under the profiling system; however, the result will be a greater precision in identification. The Department will notify States if any additional optional variables are identified.
Finally, a profiling system may not produce results which discriminate in violation of any Federal or State law or which otherwise unfairly favors some claimants over those similarly situated with respect to their need for reemployment services. To this end, under the authority granted by Section 303(j)(1)(D), SSA, which allows the Secretary to establish other requirements as are determined appropriate, the Department has determined that the following elements may not be used in the profiling system: age, race, ethnic group, sex, color, national origin, disability, religion, political affiliation and citizenship.
(2) Statistical Modeling versus Characteristic Screening. Statistical modeling uses a set of variables in combination simultaneously. Each variable receives a weight (or "coefficient") that has been established by a statis-tical process. The weighted average produces a ranking. Characteristic screening, on the other hand, uses each variable as an exclusion variable. That is, depending on whether the answer is "yes" or "no" to a given question, claimants will be either included or excluded. Unlike statistical screening, no ranking is produced.
Referral to services based on statistical modeling will be based on a numerical score since the higher the score, the more likely the claimant will exhaust and the greater the need for services. If claimants have the same scores, and there are not sufficient opportunities to participate in reemployment services, States must randomly select among those claimants for referral to assure claimants are treated equitably and the profiling system is legally defensible. Since claimants identified through characteristic screening cannot be ranked, States using this system must also randomly select from among the identified claimants for referrals. Under the authority granted by Section 303(j)(1)(D), SSA, which allows the Secretary to establish other requirements as are determined appropriate, the Department has determined that random selection is required for use in profiling systems.
The Department encourages the use of statistical models since they are more efficient and precise in identifying claimants as well as easier to manage and adapt. However, States may use characteristic screening. Whichever system is used, each State must assure that the system implemented in fact identifies claimants who are permanently laid off and unlikely to return to work in either their previous industry or occupation.
The Selection Pool. Under the profiling system anticipated by the Department (see item 4), all claimants identified in accordance with the requirements of Section 303(j)(1), SSA, will be either immediately referred to reemployment services or, if services are not available, placed in a selection pool. Claimants in the selection pool may be referred to services at a later date.
As noted in the background section, early intervention is one of the principal aims of the worker profiling and reemployment services initiative. Holding claimants in the pool for more than a minimum period of time will not achieve this early intervention. Therefore, the Department recommends that claimants be removed from the selection pool after 4 weeks.
In addition, the Department recognizes that large-scale permanent layoffs and plant closings do not occur at regular intervals. Therefore, there may be times when a State elects to retain claimants in the pool for longer periods. States may also elect to vary the length of time individuals are held in the pool by locality within the State.
Notifications of Referrals to Reemployment Services. Notification to claimants of referrals to reemployment services should occur only if a referral is actually made. (It is not necessary to notify claimants that they have been placed in the selection pool since they are not required to take any action until a referral is made.) These notification and referral notices must be in writing and must advise claimants:
That they have been identified as likely to need reemployment services in order to make a successful transition to new employment.
When and where to report for the services.
To bring all relevant information concerning ongoing or recently completed reemployment services or current training in which they have participated and believe would help them return to work. Alternatively, States may choose to have certain claimants, such as those already in training, contact the UI agency first. Either way, the notice must clearly explain what information the claimant is expected to provide and to whom.
That failure to participate in reemployment services may result in denial of UI.
Each State must maintain a record of each claimant referral notification in the same manner that it would any other formal correspondence that is pertinent to the adjudication of UI eligibility issues.
Adjudication of Issues Associated With Profiling and Reemployment Services.
Participation Requirement. Section 303(a)(10), SSA, creates a requirement that "as a condition of eligibility for regular compensation for any week, any claimant who has been referred to reemployment services . . . participate in such services or similar services." (Emphasis added.) The Department interprets the phrase "for any week" to mean that a claimant must participate in reemployment services (as defined in item 6 above) only during the week or weeks that the claimant is required to attend. Therefore, eligibility with respect to participation in reemployment services is determined on a weekly basis.
Claimants must be held ineligible for any week in which there is a failure to participate in reemployment services which they are required to attend unless they: have justifiable cause, have completed such services, or are attending similar services, as discussed below. Federal law does not require, however, that the maximum UI benefit amount be reduced.
Federal law does not require State UI laws to provide for a finding of ineligibility when claimants are no longer required to participate. For example, a claimant may refuse to participate during one week and be held ineligible for that week. If the claimant is required to participate the next week and again refuses, then the claimant will continue to be ineligible. However, if the claimant is not required to participate the next week, then there is no failure to participate and the State is not required to find the claimant ineligible. Similarly, a claimant who has refused to participate in available services and has been held ineligible may later agree to participate. In this case, if the services are no longer available to the claimant, Federal law does not require the claimant to be held ineligible for any additional weeks since there is no longer a failure to participate.
There is also no failure to participate when the service provider relieves claimants of the requirement that they attend. This may occur when, for example, a claimant notifies a provider of an inability to participate due to a family emergency and the service provider advises the claimant that it is not necessary to participate. (Note: This may raise an availability issue for the week(s) in question. This is why service providers must provide information concerning availability under item 5.b. above.)
Claimants are not required to be held ineligible if the failure to participate is minimal and does not significantly affect their ability to benefit from the reemployment services in attempting to obtain new work. For example, if a claimant misses one hour of an eight hour seminar, the State may find that this limited absence is not a failure to participate.
Similar Services. Under Section 303(a)(10), SSA, a claimant referred under the profiling system is not required to participate in reemployment services if the claimant is participating in "similar services."
"Similar services" are reemployment services that claimants are attending on their own initiative. Examples of "similar services" include, but are not limited to, services offered by a company prior to a permanent layoff or services offered by private employment agencies. The "similar services" need not be identical to those to which the claimant was referred by the State; they need be only reasonably similar. The quality of the services being provided should be a relevant factor in determining whether the services are "similar."
Under the Secretary's Standard for Claim Determinations, the UI agency is required to obtain and record such information as will reasonably insure the payment of benefits to individuals when due. Therefore, the UI agency must perform sufficient factfinding to determine if, in fact, the services are similar. This means the UI agency must determine, among other things, to what services the claimant was referred and what the "similar services" are which the claimant is (or will be) attending.
Exceptions to Participation Requirement. Section 303(a)(10), SSA, contains two exceptions to the participation requirement. The first is whether the claimant has completed such services. The second is whether "justifiable cause" exists for the claimant's failure to participate in the services. (Note: As indicated in item 11.b, there is no participation requirement if claimants are participating in similar services.)
(1) Completion of "Such Services". Section 303(a)(10)(A) provides that a claimant who has completed "such services" is not required to participate in services to which the claimant has been referred. How recently the services were completed should be considered in making this determination since, for example, certain approaches to finding a job may have changed due to changing labor market conditions. Although the language "such services" appears to refer to those services to which the claimant was referred, it is reasonable to also include the completion of "similar services." Therefore, the Department interprets Section 303(a)(10)(A), SSA, as allowing States to consider the completion of "similar services" as the completion of "such services."
(2) Justifiable Cause. Section 303(a)(10)(B) provides that a claimant who has "justifiable cause" is not required to participate in services to which the claimant has been referred. As noted in (1) above, although the language "such services" appears to refer to those services to which the claimant was referred, it is reasonable to also include the completion of "similar services." Otherwise, claimants attending "similar services" would not be relieved of the requirement to participate when justifiable cause exists. Therefore, the Department interprets Section 303(a)(10)(B), SSA, as allowing States to consider justifiable cause as a reason for not participating in "similar services."
For purposes of ensuring consistency with Section 303(a)(10), SSA, States must apply the "reasonable person" test in determining if justifiable cause exists for failure to participate. That is, States must determine if the reasons offered by claimants for failure to participate are such that a reasonable person would not have participated. As in other areas where the "reasonable person" test is used, such as failure to report to the UI office as required, States must expect that claimants take the actions a prudent and reasonable person would take prior to concluding that participation is not possible. For example, although a reasonable person would not be expected to leave children at home unattended, a reasonable person would also be expected to make an effort to obtain child care.
A finding of justifiable cause will last only for the period the justifiable cause is relevant. For example, justifiable cause due to short term illness will last only for the period of the illness. There may be cases when the State determines that the justifiable cause continues for a longer period or through the life of the claim, for example, when the claimant is in approved training under State law. (Note: The Department anticipates that claimants in approved training will not be required to participate in reemployment services while they are in training.)
Relation of Participation Requirement to Other State Eligibility Requirements. Depending on the nature and extent of the reemployment services in which the claimant is participating, States should apply other eligibility requirements in such a way as to not overly burden the claimant. For example, the State may choose to reduce the number of work search contacts required or relieve the claimant of the work search requirement during a period of participation in reemployment services, as appropriate.
As noted in UIPL 13-94, Change 1, the justifiable cause exception does not supersede State able and available requirements, but rather is an additional eligibility requirement related to participation in reemployment services. Claimants may be determined to have justifiable cause for failure to participate in reemployment services; however, they must still meet a State's able and available requirements to be eligible for UI. For example, although a claimant who is ill may have justifiable cause for failure to participate in reemployment services, the claimant is still subject to the State's able and available requirements and may, as a result, be ineligible for UI.
Appeal Rights. Under paragraphs (1) and (3) of Section 303(a), SSA, any eligibility determination that a claimant has failed to participate in reemployment services must be appealable. In addition, all determinations of UI eligibility must contain appeal rights in accordance with the Secretary's Standard for Claim Determinations.
Although States must allow claimants to appeal denials for failure to participate in orientation and assessment, States are not required to permit claimants to contest the propriety of the referral to orientation and assessment. Orientation and assessment are aimed at determining what, if any, additional reemployment services may be needed by the claimants. Obviously, if claimants do not report, this determination cannot be made. In this regard, referrals to orientation and assessment are similar to reporting and "call-in" requirements.
Claimants must, however, be allowed to question whether any services tailored to the individual are, in fact, needed. If any evidence appears at any stage of the nonmonetary determination or appeals process indicating that the claimant does not need these services, the UI agency must take the initiative in determining whether the referral was proper. If it is found not to be proper, then the participation requirement does not apply and there is no need to address exceptions such as justifiable cause.
Feedback and Reporting. Section 303(j)(1)(C), SSA, requires that States collect follow-up information relating to the reemployment services received by the referred claimants and the employment outcomes for these claimants. This information is to be used in refining the profiling system. Section 303(a)(6), SSA, also requires the States to provide "such reports, in such form and containing such information as the Secretary of Labor may from time to time require . . . ."
Under these authorities, States will be required to submit information concerning profiling to the Department. This UIPL does not address what information must be collected or reported. Specific instructions for reporting any information on services and outcomes will be issued as changes to ETA Handbook 401, "Unemployment Insurance Reports Handbook".
Action Required. Administrators are requested to provide this information to the staff developing the worker profiling and reemployment services system.
Inquiries. Inquiries should be directed to the appropriate Regional Office.
Attachment. Sections 303(j)(1) and 303(a)(10), SSA.