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

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEUPDI

ISSUE DATE

April 9, 1999

RESCISSIONS

None

EXPIRATION DATE

April 30, 2000

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 23-99

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

GRACE A. KILBANE
Director
Unemployment Insurance Service

 

SUBJECT

:

Implementation Deadline Requirement: Electronic Quarterly Statement of Benefits Paid to Combined Wage Claimants (TC-IB6)

 

  1. Purpose. To remind State Employment Security Agencies (SESAs) that the implementation requirement for the use of the electronic Quarterly Statement of Benefits Paid to Combined Wage Claimants (TC-IB6) via ICON was established as transactions for the quarter ending March 31, 1999.

  2. References. Section 3304(a)(9)(B) of the Internal Revenue Code, as amended; 20 CFR 616; ET Handbook No. 399; UIPL 28-97, dated April 24, 1997; UIPL 15-98, dated February 12, 1998; UIPL 27-98, dated May 6, 1998; and the ICON User Guide.

  3. Background. Administration of the combined wage claim (CWC) program involves the transfer of wages, exchange of information pertaining to CWC status/disposition of transferred wages, quarterly billing of benefit charges to transferring States and the quarterly reimbursement of benefit charges between States. These administrative activities require the use of the Request for Wage Transfer (TC-IB4), the Report on Determination of CWC (TC-IB5), the Quarterly Statement of Benefits Paid to Combined Wage Claimants (TC-IB6) and the U.S. Department of Treasury's On-line Unemployment Trust Fund Accounting System (UTFAS).

    To increase the quality and timeliness of benefits paid under the CWC program and to create a more efficient method for handling the administrative activities, the release of ICON applications for handling CWC transactions began in 1989. ICON applications to handle the transmission of electronic TC-IB4 and TC-IB5 data were released to the States in 1989 and 1990, respectively. Currently, all States except the Virgin Islands are operational on these applications. In 1997, the U.S. Treasury expanded its UTFAS's capabilities to allow States to make quarterly IB6 reimbursements through fund transfers between States' accounts. Using the UTFAS eliminates CWC administrative costs associated with the use of checks or electronic fund transfers between banks and the potential loss of interest income to the UTF. Currently, there are forty-four States using this system for reimbursements.

    The TC-IB6, commonly called the quarterly bill, is the final module in automating the administrative processes between States that are necessary for the combined wage program. This module was completed and tested in 1997. National distribution was delayed because of the year 2000 considerations. However, as of late 1997, 19 States had requested and received the application code from Lockheed Martin. Therefore, after consultation with the Interstate Conference of Employment Security Agencies' Interstate Benefit (IB) Committee, the application code was released to all States with an implementation requirement of the billing cycle for the quarter ending March 31, 1999.

    Before and after the distribution of the TC-IB6 application, the requirements of the system were explained at sessions held at the annual meeting of interstate program and information technology staff. SESAs continue to be allocated special funding to install, interface, and maintain the ICON applications.

  4. Reminder. Some SESAs have not installed the required applications to date. The time frame for issuing the first quarter (ending March 31, 1999) TC-IB6 timely, is extended until May 15, 1999. Therefore, there is still time for States to meet the implementation requirement. SESAs' failure to electronically transmit the required data will have an adverse effect on all other States as they must continue to maintain a manual system in order to handle hardcopy IB6s received from such States.

  5. Requirement for Conformity and Compliance. Section 3304(a)(9)(B) of the Federal Unemployment Tax Act requires States to participate in any combined wage claim arrangement approved by the Secretary of Labor (in consultation with the State agencies). Title 20 C.F.R. 616.13, in pertinent part, implements this arrangement by providing that:

    Each State agency will cooperate with every other State agency by implementing such rules, regulations, and procedures as may be prescribed for the operation of this [combined wage] arrangement.

    Effective no later than May 15, 1999, electronic data communication is the prescribed procedure for handling IB6 billings by CWC Paying States.

  6. Transition Procedures. States that have not maintained an electronically accessible TC-IB5 file will not be able to create TC-IB6s that carry the "key" identifying the TC-IB5 used in the calculation of the charges. States receiving these records will have to manually edit the charges. However, States should not delay TC-IB6 implementation until they build TC-IB5 files.

    Recognizing that some States may not meet the May 15, 1999, deadline, transition procedures were discussed with the IB Committee at its February 1999 meeting. The discussion centered around the issue of whether or not States that have the ICON TC-IB6 application in place have to make a distinction between States that were operational and those that were not creating and sending electronic TC-IB6s.

    The decision was that States with the electronic TC-IB6 installed should create and send both an electronic and a hardcopy IB6 to each State. This will eliminate the sorting burden for the paying States that are operational on the TC-IB6. The TC-IB6 data addressed to States that are not operational by May 15, 1999, will thereafter be discarded by the HUB.

  7. Action Required. State Administrators are requested to take the necessary actions to ensure that, no later than May 15, 1999, all quarterly IB6 bills will be transmitted and received via ICON.

  8. Inquiries. Questions regarding this directive should be directed to the appropriate Regional Office.