U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210
March 23, 1999
UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 21-99
ALL STATE EMPLOYMENT SECURITY AGENCIES
GRACE A. KILBANE
The Workforce Investment Act of 1998 - Affect on the Unemployment Insurance Program
Purpose. To inform the States of provisions of the Workforce Investment Act of 1998, Pub. L. 105-220 (WIA), that affect the unemployment insurance (UI) program.
References. The WIA, the Wagner-Peyser Act, the Job Training Partnership Act (JTPA), the Social Security Act, and the Federal Unemployment Tax Act.
Background. The WIA is the first major legislation addressing the nation's job training system in more than 15 years. Under the WIA, the Federal government, States, and local communities are provided with an opportunity to develop a system that provides workers with the information, advice, job search assistance, and training they need to get and keep good jobs. The system established under the WIA will also provide employers with skilled workers.
Although the WIA does not amend Federal UI laws, it does require that programs authorized under State UI laws, in accordance with applicable Federal law, be mandatory partners. As a mandatory partner under WIA, State UI programs must make available applicable services to parti-cipants, through a One-Stop delivery system. Two related partners are those agencies operating the programs authorized under the Wagner-Peyser Act and title II of the Trade Act of 1974. Also, UI wage records must be made available under the WIA for evaluating performance and creating consumer reports that provide key information on the performance of training and education providers. These data exchanges will be facilitated across States through the electronic wage record interchange system (WRIS) overseen by the Interstate Conference of Employment Security Agencies (ICESA) on behalf of all States. See Attachment B for further information on WRIS.
Other provisions of WIA that affect the UI program include:
the authorized use of real property in which the Federal government has acquired equity through UI or Wagner-Peyser administrative grants, or through Reed Act funds;
the establishment of an employment statistics system;
the continued application of the approved training provisions of the JTPA for dislocated workers during the transition period to WIA; and
the UI role in a State's submission of a unified plan.
The specific WIA provisions that impact the UI program are described in the attached WIA-UI synopsis (Attachment B).
As expressed in the attached policy paper (Attachment A), the Department of Labor strongly encourages maximum involvement of the UI program in the WIA system, including participation in WRIS. As a mandatory partner and as a provider of critical information, the UI system has a significant role under the WIA.
Effective Dates. States may voluntarily implement WIA provisions beginning July 1, 1999; however, all States must implement the WIA in its entirety by July 1, 2000. The new Section 15 of the Wagner-Peyser Act, as added by Section 309, WIA, to create the employment statistics system, is effective July 1, 1999. The JTPA provisions terminate June 30, 2000.
Action. The Department encourages State UI agencies to participate as active partners in the WIA to the maximum possible extent, to amend UI laws as necessary to facilitate use of information for the purposes of the WIA, and to begin participating in WRIS.
Inquiries. Please direct inquiries to the appropriate Regional Office.
Unemployment Insurance and the Workforce Investment Act, and
Synopsis of WIA Provisions with UI Relevance.
WORKFORCE INVESTMENT ACT
Implementation of the Workforce Investment Act (WIA) offers an opportunity for States to forge closer linkages between programs including unemployment insurance (UI) claims services and reemployment services. With the evolution of One-Stop centers and telephone/internet UI claims systems, new ways are needed to ensure that UI beneficiaries are connected with reemployment services and that One-Stop centers have the information that unemployed workers need to be able to file UI claims.
In addition, UI wage records will be a critical resource for evaluating training and other services provided through the WIA. Each State is expected to have an agency that will compile UI wage record information about those who participate in WIA services and provide statistical information to the public about the post-participation labor market experiences of participants.
ACCESS TO UI CLAIMS INFORMATION
Providing information about filing claims for UI benefits is one of the core services that WIA requires for One-Stop centers. Anyone who goes into a One-Stop center should be able to easily learn how to file for UI benefits and ideally be able to file a claim on the spot. (The Employment and Training Administration required, as part of the One-Stop grants, that workers be able to file claims for benefits in One-Stop centers.) There are a variety of ways to provide these services, and States will employ different methods, using the approaches that best meet the needs of their customers. On-site telephone and electronic access to claims services, brochures, posters, and other information are examples.
Many One-Stop centers will probably have telephones that can be used to access claims filing systems. Others may have electronic self-filing for those that are comfortable with using automated systems.
In addition to having telecommunications or electronic linkages to claims systems and information, One-Stop center staff should be available to assist those who have difficulty using those systems. It will not be feasible to have staff that are conversant in all the details of UI in every One-Stop center; however, One-Stop staff should be able to help customers access UI benefits and appropriate information. UI agencies and local One-Stop systems should determine how best to provide unemployed workers access to UI benefits.
In addition, One-Stop centers should be stocked with brochures that give basic information about eligibility for benefits, how to file claims, how new businesses register and pay UI taxes, how to file quarterly wage and tax information, employer and claimant appeal rights and how to file an appeal, and other pertinent topics.
GATEWAY TO THE WORKFORCE DEVELOPMENT SYSTEM
UI claims filing should be a gateway for unemployed workers into the workforce development system. Information collected as part of the claims process and used in Worker Profiling can help to identify beneficiaries who are likely to need reemployment services. Follow up eligibility interviews, held periodically during an individual's claim period, are also good opportunities to determine whether additional services are needed and to make workers aware of the kinds of services available and how to access them.
LINKAGES WITH REEMPLOYMENT SERVICES
There are a variety of ways that States might link UI claimants with reemployment services, including Worker Profiling. One possible linkage is an electronic connection between claims systems and the electronic labor exchange tools--America's Job Bank (AJB), America's Talent Bank (ATB), and Career InfoNet. Ideas that are being explored include development of an ATB r&#eacute;sum&#eacute; concurrent with filing an initial claim and access to AJB listings and labor market information by staff conducting eligi-bility interviews.
Other ideas include "cross marketing" of reemployment services in connection with telephone initial claims filing. Claims systems could be designed to provide telephone claims staff with the location of One-Stop centers convenient to claimants based on their zip codes. As part of the initial claim interview, claimants would be told the One-Stop location and which services are offered.
USING UI WAGE RECORDS FOR EVALUATING PERFORMANCE
UI wage record data provide a valuable tool for evaluating training providers and measuring State and local performance by examining the labor market experiences of those who have participated in WIA programs. The Congress has made clear that continued investment in training and reemployment services is contingent on data demonstrating that training and other services are of value to participants. Wage record data can also be used to determine which service providers' programs are the most successful--by looking at how many of those who participated in the services are working and how much they are earning. A State agency designated by the Governor will develop and distribute consumer reports that provide key information on the performance of the service providers.
The WIA requires that States use quarterly wage records (consistent with State laws) to measure State and local performance and to make those records available to other States to carry out the State plan or complete the annual report. An electronic wage record interchange system (WRIS) has been developed as a pilot system so States can easily find wage and employment information on individuals who are working in States other than the one where they participated in WIA programs. Central to the WRIS design is an index of the social security numbers reported on State quarterly wage records. Inquiries that match a social security number with one in the index will be routed to the State where the information is located. The information will be retrieved and forwarded to the State entity that made the inquiry and will be used in State performance measures or in consumer reports.
The WIA establishes a platform for multiple programs to collaborate through a variety of mediums to better serve their customers and meet program goals. As WIA partners, UI agencies have the opportunity to become actively engaged in strengthening services for America's workers and employers.
Synopsis of WIA Provisions with
Unemployment Insurance (UI) Relevance
One-Stop Service Delivery System: Section 121, WIA. The WIA mandates a One-Stop service delivery system designed to link services across programs to provide easier access and better services to customers. One-Stop service centers will provide information to the public about jobs, labor market dynamics, available training and education opportunities, and links to other services.
Each local area is required to have at least one physical "full service" center at which customers can access services from each of the One-Stop partners. This center may be augmented by additional "full service" centers, by a network of affiliated sites, or by a network of One-Stop partners consisting of a combination of physical sites or electronic access points.
Required One-Stop Partners: Section 121(b), WIA--This section requires that State UI agencies participate as partners in the local One-Stop system. In addition to the UI agencies, government agencies that administer the following programs are also mandatory One-Stop partners:
Core Services: Section 134(d)(2), WIA--Each One-Stop system must provide, at a minimum, "core services" including the "provision of information regarding filing claims for unemployment compensation." UI services in One-Stop centers are not limited by the WIA to only providing information about how to file UI claims, however. UI agencies are encouraged to provide any other claimant (or employer) service through the One-Stop system that the agencies consider best for their customers. UI services may be provided in the One-Stop environment through on-site staff, telephones for claims filing, or other methods the State UI agency considers effective.
The One-Stop system will also provide available reemployment services to UI claimants, including those who have been determined under the worker profiling and reemployment services system required by Section 303(j), Social Security Act (SSA), as likely to exhaust UI benefits and need such services. The One-Stop system will also assist the UI program in verifying that UI claimants are satisfying availability requirements and any applicable work search requirements.
Other core services include skill level assessment, job search and placement assistance, labor market information, and performance and cost information on eligible training providers.
Memorandum of Understanding: Section 121(c), WIA--Each One-Stop partner is required to enter into a Memorandum of Understanding (MOU) with the local board that is responsible, in collaboration with the local elected official, for overseeing the One-Stop system in its local area. Each MOU will describe: (a) the services to be provided through the One-Stop system; (b) how the costs of the services and the operating costs of the system will be funded; (c) methods of referral of individuals between the One-Stop operator and the One-Stop partners; (d) the duration of the MOU and the procedures for amending the MOU during its duration; and (e) any other provisions consistent with the WIA that the parties determine are appropriate.
Performance Measures: Section 136, WIA. With respect to WIA-funded activities, each State will be required to meet performance measures negotiated with the Secretary of Labor based on core indicators established by the WIA. States will, in turn, negotiate performance measures with local areas. States will maintain a list of all eligible training providers that shows each provider's performance. The list will be available for public use, primarily for the benefit of training recipients when considering which provider's services to use.
The core indicators of performance include, among other things, entry into, retention in, and earnings from unsubsidized employment.
Wage Record Information: Section 136(f)(2), WIA, and Section 15(e)(2)(I), Wagner-Peyser (created by Section 309, WIA)--The WIA requires States to use quarterly wage records, consistent with State law, in measuring State progress on the WIA performance measures. States must also share wage record information, consistent with State law, with other States for performance measurement purposes. The State WIA plan must describe the strategy for using wage record data for performance and identify the entities that will have access to wage record data.
Wage record interchange system: The Secretary of Labor is charged with making arrangements, consistent with State law, to ensure that the wage records of any State are available to any other State for performance measurement purposes. To this end, an electronic wage record interchange system (WRIS) has been developed as a pilot system, with plans for it to become an operational system during fiscal years 1999-2000. Central to WRIS will be an index of all social security numbers (SSNs) reported on the quarterly wage records of all States. The index will have three information items for each entry--an SSN, the quarter, and the State that holds the wage record. When an authorized State agency needs information for performance measurement purposes, the index will be searched via electronic request to determine where wage record information on an individual exists. If an SSN match occurs, a request for wage information will automatically be transmitted to the State where the wage record for the individual is located. The wage information will then be sent electronically to the requesting agency.
The UI Information Technology Support Center (ITSC) has developed and successfully tested the pilot WRIS in several States. The Interstate Conference of Employment Security Agencies (ICESA) has now agreed to govern and oversee the business operations of WRIS. Those business operations include developing data sharing agreements, monitoring WRIS, and collection of user charges associated with WRIS. The plan for implementing WRIS is to have the ITSC operate WRIS for an initial group of States (up to 16) while Lockheed Martin Corporation develops a full-scale opera-tional WRIS. The operational system will be implemented as part of the overall ICON (interstate connection) system and is expected to be ready for testing in early 2000. After testing is successfully completed, the ITSC will transition the technical responsibility for WRIS operations to Lockheed Martin in accordance with a jointly agreed upon transition plan. Governance and oversight of business operations will remain with ICESA. The transition of responsibility ill have minimal impact on the initial group of States participating in WRIS.
States that want to participate in WRIS should take the following actions:
Participation in WRIS is voluntary, but it provides an efficient means for States to make possible the interstate use of wage record data. Without WRIS, a State's measure of the performance of its workforce investment system would be incomplete. Because of the importance of WRIS to the operations of the Workforce Investment System, States are encouraged to participate.
A series of documents pertaining to WRIS produced by the ITSC are available on the UI web site at www.itsc.state.md.us. A more detailed technical and operational description of WRIS will be issued soon by the appropriate program office within the Department. Additional details on governance of WRIS will be included in that issuance, to the extent it is available.
Confidentiality: As noted above, the WIA requires States to use quarterly wage record information for performance measurement and to share the wage record information with other States for the same purpose. The WIA did not change the basic requirements concerning the confidentiality of UI data. Therefore, the Department of Labor's interpretation of Federal UI law concerning confidentiality applies. (1) Consequently, the wage record information may only be disclosed to public officials or their agents in the performance of public duties, or to private entities on the basis of the informed consent of the individual or the employer to whom the information pertains. Disclosure for WIA purposes must be consistent with one or more of these conditions. As currently envisioned, however, wage record use for consumer report and performance management purposes under WIA is consistent with these requirements. Therefore, States should not experience conflict between such uses and Federal UI law.
Real Property: Section 193, WIA. The Governor of a State may authorize a public agency to make available, for One-Stop purposes, any property in which the Federal government has acquired equity through the use of funds provided under Titles III and IX of the Social Security Act and the Wagner-Peyser Act if the public agency is a One-Stop partner. This provision applies only to properties in which the Federal government had acquired equity as of August 7, 1998.
Although this provision does not specifically include Reed Act equity, which is State rather than Federal equity, Reed Act equity is subject to this provision through the specific reference to Section 903(c), SSA. Section 903(c), SSA, contains the authorization for Reed Act money to be used for UI and Employment Service administration, including the purchase of real property.
Therefore, the Department of Labor considers Section 193, WIA, to authorize the use of such real property for WIA purposes.
Once a property becomes a One-Stop service center, each partner must pay a fair share of the operating costs based on the use of the One-Stop delivery system by individuals attributable to the partner's program. Methods of cost allocation must be consistent with the requirements of the Office of Management and Budget circulars.
Employment Statistics System: Section 309, WIA This section of the WIA adds a new Section 15, "Employment Statistics," to the Wagner-Peyser Act, establishing a nationwide employment statistics system. The Bureau of Labor Statistics has responsibility for the system which will be planned, administered, overseen, and evaluated through a cooperative governance structure involving the Federal government and the States. The statistics system will include, among other things, "employment and earnings information maintained in a longitudinal manner to be used for research and program evaluation" and will meet the information needs for the employment and training activities under WIA. Section 15(c), Wagner-Peyser, also requires the annual submission of a Federal-State cooperatively developed plan regarding the statistics system.
Section 15(e), Wagner-Peyser, requires each Governor to designate a single State agency to manage a statewide employment statistics system and participate in the development of the State's annual plan. Among the State agency's responsibilities are the collection and dissemination of labor market and job training information. The agency is also required to use wage record information to assist the State and other States in measuring progress on State performance measures.
Unified Plans: Section 501, WIA. This section allows States to develop and submit a unified plan for activities covered under WIA. If a State chooses to submit a unified plan, it must include at least one of the following activities:
States also have the option of including the following DOL programs in the unified plan:
Further information will be forthcoming on how the unified plan provisions of the WIA relate to UI.
Approved Training. Section 3304(a)(8) of the Federal Unemployment Tax Act (FUTA) prohibits the denial of UI to a worker who is in training with the approval of the State UI agency. Section 314(f)(2) of the Job Training Partnership Act (JTPA) provides that an eligible dislocated worker participating in training (except for on-the-job training) under Title III, JTPA, "shall be deemed to be in training with the approval of the State agency for purposes of" the FUTA. The WIA contains no provisions requiring WIA training to be considered approved training for UI purposes. However, during the transition to WIA, the requirement of Section 314(f)(2), JTPA, will be maintained. The Department anticipates that State UI agencies will continue to treat such training as approved training for UI purposes.
1. UIPLs 23-96 and 34-97 discuss the confidentiality requirements. The Department plans to issue confidentiality regulations regarding UI information, including wage record information, soon. Because these UIPLs are broadly written, they could be read to apply to wage records collected and maintained by non-UI agencies for purposes of the Income Eligibility Verification System established by Section 1137, SSA. This is not the case. Only when information contained in these non-UI wage records is transmitted to the UI agency does the information become UI information and subject to UI confidentiality requirements. (This situation only exists in two States: Massachusetts and New York.)