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

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEURL

ISSUE DATE

Oct. 5, 1995

RESCISSIONS

None

EXPIRATION DATE

 

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 02-96

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

MARY ANN WYRSCH
Director
Unemployment Insurance Service

 

SUBJECT

:

Approval of Training for Individuals who Reside in or File from Another State

  1. Purpose. To inform States of the Department of Labor's position relating to the approval of training for individuals who reside in or file an unemployment compensation (UC) claim from another State.

  2. References. Sections 3304(a)(8) and 3304(a)(9)(A) of the Federal Unemployment Tax Act (FUTA); Draft Legislation to Implement the Employment Security Amendments of 1970 . . . H.R. 14705 (1970 Draft Legislation), Unemployment Insurance Program Letter (UIPL) 1276, dated July 22, 1974; and 20 C.F.R. Part 616.

  3. Background. The Department has discovered that some States restrict the approval of training to that which is provided within the State. Since 1974, it has been the express position of the Department that such restrictions are contrary to the requirements of Sections 3304(a)(8) and (9)(A), FUTA. This UIPL is issued to restate this position.

  4. Applicable Provisions of Federal Law. Section 3304(a)(8), FUTA, requires that a State law, as a condition of certification for credit against the Federal unemployment tax, 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 for work, active search for work, or refusal to accept work).

    The expressed intent of Congress in enacting this section was "to act to remove the impediments to training which remain in our unemployment insurance system." (H.R. Rep. No. 612, 91st Congress, 1st Session 17).

    Section 3304(a)(9)(A), FUTA, further requires a State law to provide that:

    compensation shall not be denied or reduced to an individual solely because he files a claim in another State (or a contiguous country with which the United States has an agreement with respect to unemployment compensation) or because he resides in another State (or such a contiguous country) at the time he files a claim for unemployment compensation.

    The expressed intent of Congress in enacting this section was to remove provisions of law "which reduce the benefits, or otherwise penalize workers who reside elsewhere than in the State in which they worked and earned their right to benefits," because such provisions "are not only inequitable to the individual claimant and injurious to the proper function of the unemployment system but inhibit among workers a very desirable mobility which is important to our economy." (H.R. Rep. No. 612, 91st Congress, 1st Session 17).

  5. Department of Labor Position. Section 3304(a)(8), FUTA, prohibits the denial of UC to an individual undertaking training "with the approval of the State agency." In the 1970 Draft Legislation, the Department stated that "each State is free to determine what training is appropriate" and "what criteria are established for approval of training." As a result, the 1970 Draft Legislation provided only suggested criteria. Since then, the Department has, however, required that States apply "reasonable" criteria for the approval of training, and taken the position that the refusal of approval of training solely because the training is conducted in another State would be inconsistent with Sections 3304(a)(8) and (a)(9)(a), FUTA. (See UIPL 1276, Section (A)(4)).

    Limiting approval of training to that within a State would create an unreasonable burden on an individual residing in or filing a UC claim from another State, with the result that the individual would be discouraged from participating in training. In cases where such individuals cannot reasonably be expected to commute to training in a State in which they do not reside, individuals would have no choice but to choose between attending training or receiving UC. This result would be inconsistent with the expressed intent of Congress in enacting the approved training provision.

    Further, Section 3304(a)(9)(A), FUTA, precludes denial of UC to an individual who files a claim or resides in another State (or a contiguous country with which the United States has an agreement with respect to UC) at the time he or she files a claim for UC. A State's refusal to approve training solely because it is conducted in another State is plainly inconsistent with this requirement. This result is also plainly inconsistent with the expressed intent of Congress since it inhibits the individual's mobility.

    Limiting approval of training to institutions certified by the State Board of Education, or a similar State entity, also limits the approval of training to that undertaken within the State. This creates the same problems with Federal law as discussed in the two preceding paragraphs. States wishing to limit training to certified institutions must, therefore, provide for the approval of training taken at an institution certified by the State Board of Education or similar entity in the State in which the institution is located.

    If the individual is attending training in another State, sufficient information must be collected to determine if the individual is attending training which is approvable under the appropriate State law. For interstate claims, the authority to approve training rests with the liable State. However, the liable State may adopt a determination by the agent State approving training for a particular individual or delegate such authority to the agent State. In fact, liable States should place as much reliance as possible on the recommendation of the agent State since the agent State is usually in the best position to know the individual's personal situation and its own labor market. Similarly, in a combined-wage claim, the paying State has the authority to approve training. The paying State may also adopt a determination by another State or delegate the authority for approval of training to the other State. Further, a transferring State must transfer wages and reimburse the paying State as provided in 20 CFR Part 616, without regard to approval of training by the paying State. The paying State may not refuse to approve training solely because the individual has no (or insufficient) covered wages or employment to qualify for benefits in the paying State.

  6. Action Required. States are to examine their current law, regulations, and procedures relating to the approval of training for individuals who reside in another State or who have filed either interstate or combined-wage claims and determine whether the current law, regulations, and procedures conform to the requirements of Federal law. If they do not, the State must notify the appropriate Regional Office of the Department of Labor as to how and when the law will be amended or the regulations and procedures changed.

  7. Inquiries. Inquiries should be directed to your Regional Office.