Disaster Unemployment Assistance Program; Interim Final Rule; Request for Comments

SUMMARY: The Employment and Training Administration of the Department

of Labor is issuing this interim final rule, effective upon

publication, amending 20 CFR 625.6 to remove restrictive provisions,

provide a more equitable weekly assistance amount to individuals

unemployed as a result of a major disaster, and to clarify and simplify

the States' administration of the Disaster Unemployment Assistance

Program. To provide an opportunity for public participation in this

rulemaking, a comment period is provided, and a final rule will be

published after taking into account any comments that are received.

DATES: Effective date: The effective date of this interim final rule is

May 11, 1995.

Comment date: Written comments on this interim final rule must be

received in the Department of Labor on or before July 10, 1995.

ADDRESSES: Written comments on this interim final rule may be mailed or

delivered to Mary Ann Wyrsch, Director, Unemployment Insurance Service,

Employment and Training Administration, U.S. Department of Labor, Room

S4231, 200 Constitution Avenue, NW., Washington, DC 20210.

All comments received will be available for public inspection

during normal business hours in Room S4231 at the above address.

Copies of this interim final rule are available in the following

formats: electronic file on computer disk and audio tape. They may be

obtained at the above office.

FOR FURTHER INFORMATION CONTACT:

Robert Gillham, Group Chief, Federal Programs Group, Division of

Program Development and Implementation, Office of Program Management in

the Unemployment Insurance Service at the address listed under

ADDRESSES: Telephone (202) 219-5312 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION: Section 410(a) of The Robert T. Stafford

Disaster Relief and Emergency Assistance Act (hereafter the ``Stafford

Act'') (42 U.S.C. 5177) sets forth the outlines of the Disaster

Unemployment Assistance Program (hereafter the ``DUA Program''). The

President is authorized by section 410(a) of the Stafford Act to

provide to any individual unemployed as a result of a major disaster

declared by the President under the Stafford Act ``such benefit

assistance as he deems appropriate while such individual is unemployed

for the weeks of such unemployment with respect to which the individual

is not entitled to any other unemployment compensation * * * or waiting

period credit.'' Other terms of section 410(a) provide that disaster

unemployment assistance (hereafter ``DUA'') is to be furnished to

individuals for no longer than 26 weeks after the major disaster is

declared; and that for any week of unemployment of DUA payment is not

to exceed the maximum weekly benefit amount (hereafter ``WBA'')

authorized under the unemployment compensation (hereafter ``UC'') law

of the State in which the disaster occurred.

Pursuant to a delegation of authority (51 FR 4988, Feb. 10, 1986)

to the Secretary of Labor from the Director of the Federal Emergency

Management Agency (hereafter ``FEMA''), the DUA Program authorized by

section 410(a) of the Stafford Act is implemented in regulations

promulgated by the Department of Labor (hereafter ``Department'') and

published at part 625 of title 20 of the Code of Federal Regulations.

The amendments made by this interim final rule are applicable for

all major disasters declared on and after its effective date.

Summary of Major Provisions/Amendments to Sec. 625.6

First, the amendments retain the current provisions of

Sec. 625.6(a)(1) to utilize earnings from employment or self-employment

in a base period to compute a DUA WBA. However, new Sec. 625.6(a)(2)

provides that for purposes of a DUA WBA computation, the most recent

tax year that has ended will be considered as the base period to be

utilized in computing a DUA WBA under Sec. 625.6(a)(1). Only in certain

circumstances does a tax year coincide with the State law base period,

which, under the current provisions, requires the projection of net

income by the individual for certain periods, which may not be

accurate.

Second, under new Sec. 625.6(a)(3), adult family members employed

or self-employed as a family unit or in the same self-employment

business or trade will be treated equally in allocating wages from such

employment or self-employment where all performed services. Under the

current provisions, income may be allocated only to one individual

because of the manner in which the family was paid or based on the

manner which a tax return was filed even though all adult individuals

in the family may have participated in the employment or self-

employment. This will permit DUA to be paid to each adult family member

who participates in a family business.

Third, the up to four-step process to compute a DUA WBA under

Secs. 625.6(a) (2) through (5) is eliminated. It is replaced with new

Sec. 625.6(b) to pay 50 percent of the average weekly UC amount as the

DUA WBA to all individuals who worked full-time but have insufficient

wages to compute a weekly amount under Sec. 625.6(a)(1), or are

entitled to a DUA WBA less than 50 percent of the average weekly UC

amount as computed under the basic computation method in

Sec. 625.6(a)(1). The payment of 50 percent of the average weekly UC

amount as a minimum DUA WBA (with certain adjustments) is a significant

increase in the DUA WBA for many affected workers. Currently, the

minimum DUA WBA is generally the minimum UC weekly amount; however, in

certain cases where earnings are less than the minimum amount needed to

qualify under the State UC law, the DUA WBA may be computed at less

than the State UC minimum amount under the current provisions of

Sec. 625.6(a)(3). In these cases, individuals are often not eligible

for DUA because of the limitation imposed by the application of

Sec. 625.6(a)(5) that the DUA WBA may not exceed 70 percent of the

individual's average weekly wage.

Fourth, newly added Sec. 625.6(b)(1) provides that adjustments will

be made to reduce the minimum DUA WBA determined in accordance with

Sec. 625.6(b) for workers employed part-time prior to the date they

became unemployed due to the major disaster. However, if the DUA WBA

computed under Sec. 625.6(a)(1) is higher than the reduced DUA WBA

computed under paragraph (b)(1), the higher amount shall be paid.

Fifth, while the above provisions address the calculation of an

individual's DUA WBA based on employment and wages earned prior to the

disaster, new Sec. 625.6(f)(1) provides that wages earned after the

disaster may reduce the DUA payments for the weeks in which those wages

were earned. If an individual earns wages in a week during which DUA is

claimed, the amount [[Page 25561]] payable for that week is the DUA WBA

reduced in accordance with the earnings allowance provisions of the

applicable State law. This is the same provision that was previously

set forth at Sec. 625.6(d). However, new Sec. 625.6(f)(2) provides that

gross earnings received from the self-employment business during a week

by a self-employed individual will be deducted only during the week

received. No longer will there be a projection of future income to be

deducted on a pro rata basis from each week's benefits, which often

disqualified individuals from receiving any DUA.

Sixth, newly added Sec. 625.6(e) provides that an immediate

determination of a DUA WBA will be made based on the applicant's

statement of wages and employment or self-employment, or a combination

of the applicant's statement and documentation to support the

employment or self-employment and wages, or State agency records.

However, if the determination is based on the individual's statement

only, the individual must provide evidence of employment or self-

employment or wages within 21 calendar days. Failure to do so will

result in a denial of DUA. Section 625.6(e) also provides for certain

adjustments to the DUA WBA if partial information is submitted by an

individual within 21 days and for a later adjustment when necessary

documentation to support a redetermination is submitted.

Background--Basis for Amendments

The weekly amount computation methodology set forth in section

625.6, Disaster Unemployment Assistance: Weekly Amount, was last

revised and published in the Federal Register as a final rule on

September 16, 1977 (42 FR 46712). The section was amended, however, by

an interim final rule published in the Federal Register on January 5,

1990 (55 FR 550) and confirmed in a final rule published in the Federal

Register on May 16, 1991 (56 FR 22800) only to incorporate the amended

definition of ``State'' set forth in amended Sec. 625.2(p). At the time

of the 1977 final rule, the current section 410 of the Stafford Act was

section 407 of the Disaster Relief Act of 1974 (hereafter ``DRA''). The

Disaster Relief and Emergency Assistance Amendments of 1988 (Pub. L.

100-107, November 23, 1988) redesignated section 407 as section 410 and

the short title of the DRA was changed to the Stafford Act. Among the

amendments to section 407 included in the newly designated section 410

were the deletion of a provision that provided that the weekly DUA

amount would be reduced by the amount of any UC available to the

individual, and the addition of the provision that if an individual is

eligible for UC, such individual is not eligible for DUA. This former

provision provided the basis for the methods of the computation of a

weekly DUA amount under Sec. 625.6. At the time the interim final rule

was confirmed in the May 16, 1991, final rule, the Department was not

aware of any problems with the States' administration of Sec. 625.6 or

of any inconsistencies in the weekly amounts of DUA paid. Therefore, no

amendments were made to the computation methodology provided in the

section.

The Department's most recent guidance to the States for

administering the provisions of Sec. 625.6 for unemployed self-employed

individuals was set forth in Unemployment Insurance Program Letter

(hereafter ``UIPL'') No. 35-87, issued August 25, 1987. The UIPL

contained several key instructions. First, a self-employed individual

did not have to be totally unable to perform customary services in

self-employment as a direct result of the disaster in order to be

eligible for DUA, but could be determined eligible if he/she were

partially unemployed, where there was a substantial reduction in the

customary services that could be performed each week as a direct result

of the disaster. Second, the DUA WBA for an unemployed self-employed

individual would be computed under Sec. 625.6 based on the net earnings

shown on the individual's Federal income tax return for the year

preceding the beginning date of the disaster. Third, reductions from

the DUA WBA for partial or part-total unemployment, as provided in

Sec. 625.6(d), would be based on net earnings. Fourth, such net

earnings for a week would be determined by the individual filing an

affidavit stating what his/her anticipated net earnings would be for

the taxable year in which the disaster occurred, and such net earnings

would be prorated to a fixed weekly amount and deducted from the DUA

WBA in accordance with the earnings allowance applicable under State

law. If the individual projected no net earnings, no reduction would

occur. If the prorated net earnings equaled or exceeded the weekly

amount of DUA payable, application of the State law earnings allowance

provisions prevented the individual from being eligible for any DUA

payments even where the individual was only partially employed a few

hours each week. Fifth, if more than one family member claimed DUA

based on the same self-employment business, each individual's self-

employment income had to be supported by the previous year's Federal

tax return showing separate SE schedules, and if a husband and wife

operated the business as a partnership, there would have to exist a

form 1065 filed with the IRS and a schedule K-1 to show how the

partnership income or loss was to be allocated, in order for both

individuals to be eligible for DUA. Simply filing a joint tax return

was not sufficient for purposes of determining DUA entitlement for all

family members.

The Department's recent experience with the DUA Program pointed out

unnecessary complexities, inconsistencies and problems with certain

provisions in Sec. 625.6 and the implementing instructions in UIPL No.

35-87. This experience stemmed from several major disasters declared

from 1993 to 1994. These major disasters were: the Midwest States which

were declared major disaster areas due to flooding occurring during the

late spring and summer of 1993; the Northridge, California area

earthquake in January, 1994; the March, 1994, major disasters declared

in several Southeastern States due to severe storms and flooding; and

most recently, the salmon fishing disaster beginning in May, 1994, in

California, Oregon and Washington. Principally, these unnecessary

complexities, inconsistencies, and problems arose from: the diversity

of occupations and unemployment situations for thousands of unemployed

individuals, particularly the unemployed self-employed; the

unavailability of individuals' tax and business records because they

were lost due to the disasters, except for the salmon fishers; and the

fact that many thousands of individuals were partially unemployed as a

result of the disasters.

The current DUA regulations at Sec. 625.6(a) provide an up to 5-

step process to compute a DUA WBA: (1) Determined a WBA based on

earnings (net income for the self-employed) during the State's UC base

period and then apply the State's UC benefit formula; (2) if the amount

determined under (1) is less than the average amount of UC paid in the

State, and a higher amount can be determined based on the individual's

average weekly wage for the 13-week period immediately preceding the

date of the disaster, the higher amount will be the DUA WBA; (3) if an

amount cannot be computed under (1), then the weekly wage earned or

that would have been earned in employment or self-employment in the 13-

week period preceding the date of [[Page 25562]] the disaster is

utilized; (4) if, under (1) or (3), it is impossible to compute a WBA

for a self-employed individual because there were not net earnings, the

individual is entitled to the minimum UC WBA paid in the State; (5) any

amount computed under (2) or (3) may not exceed 70 percent of the

individual's average weekly wage, and if the result is a WBA less than

the minimum paid in the State, the individual is ineligible for DUA.

For the self-employed, as provided in UIPL No. 35-87, and for some

workers, using steps (2) or (3) requires a projection of income. This

problem is compounded for the self-employed, in that net income is for

a year and has to be divided by 52 to determine net earnings for the

13-week period.

In addition to the complexities of the current computation, there

are inconsistencies. One inconsistency arises in computing a DUA WBA

for individuals (workers or self-employed) who have minimal wages

versus a self-employed individual with no wages (net income). Under

Sec. 625.6(a)(4), an unemployed self-employed individual with no net

income (and who meets other eligibility requirements) is entitled to

the minimum WBA under State law. But Sec. 625.6(a)(5) provides that a

weekly amount determined under Sec. 625.6(a) (2) or (3) (which provide

for alternate methods of calculation based on earnings in a 13-week

period) must not exceed 70 percent of the average weekly earnings of

the individual in the 13-week period prior to the individual's

unemployment, and if the application of this limitation results in a

weekly amount less than the minimum UC weekly amount, the individual is

not eligible for DUA. Therefore, if a wage earner or self-employed

individual has $1.00 in wages up to the minimum UC qualifying amount

during the 13-week period, he/she is usually not entitled to DUA,

because the 70 percent limitation imposed by Sec. 625.6(a)(5) often

causes the individual to be ineligible for DUA. As a result, an

individual with minimal wages may not be eligible for DUA, but a self-

employed individual with no wages is entitled to DUA.

Another inconsistency arises under the provisions of Secs. 625.6

(b) and (c) (computations for the South Pacific island jurisdictions,

which are defined as ``States'' under Sec. 625.2(p)) when compared to

the computation methodology under Secs. 625.6(a) (3) and (4).

Paragraphs (b) and (c) provide for a uniform DUA WBA equal to the

average UC weekly amount paid under all State UC laws or another

uniform amount that is determined at the time of the disaster.

Therefore, the weekly amount paid in the South Pacific island

jurisdictions is significantly higher than what is paid to a self-

employed individual with no net income or to an individual with minimal

earnings in the rest of the States. The amendments made by this interim

final rule will not, however, entirely eliminate the inconsistency of

paying a higher weekly DUA amount to claimants in the South Pacific

island jurisdictions. This problem is further discussed below.

Inconsistencies also arise under Sec. 625.6(d) in computing

reductions from the WBA for partial and part-total employment during a

week for the self-employed. Section 625.6(d) provides that a reduction

will occur for wages earned during the week by applying the wages and

earnings allowance for partial and part-total employment prescribed

under the State UC law. Under the instructions in UIPL No. 35-87, if a

self-employed individual resumes some of his/her customary self-

employment activities, a projection must be made of the individual's

self-employment net income for the year taking into account any losses

due to the disaster which will adversely affect the farmer's future

income. This is because the self-employed often perform services for

their income year round, but may receive actual income only once or

twice a year.

Net income for the self-employed farmer must include any projected

or actual payments received for crop insurance proceeds or disaster

relief paid by the U.S. Department of Agriculture (hereafter ``USDA'')

because such payments are considered income for Federal income tax

purposes and are paid in lieu of being able to fully harvest a crop for

income. This annualized figure is divided by 52 to determine the weekly

income, and this weekly income figure is deducted from the DUA WBA. If

the self-employed individual projects no net income, no deduction is

made.

In many cases, the computed deductible amount is equal to or

greater than the WBA; therefore, no DUA is payable even though the

individual may have been able to work only a few hours each week. On

the other hand, a wage earner working less than full-time may receive a

full or partial DUA weekly payment since all State UC laws permit a

certain amount of income to be earned before any deduction is made from

the WBA.

The Department realized, as a result of the Midwest floods, the

California earthquake, the Southeast floods, the salmon fishing

disaster, and the thousands of partially unemployed self-employed

individuals affected by them, that the provision in Sec. 625.6(d)

requiring a reduction for wages earned and its position (as set forth

in UIPL No. 35-87) that a self-employed individual must project net

income is overly complex and may contribute to the improper payment or

denial of DUA. A self-employed individual's projected net income is

often only an ``estimate'' that may or may not be accurate. Such an

``estimate'' may result in an improper payment to a self-employed

individual determined eligible or an improper denial of DUA to an

individual determined not eligible.

Accordingly, the Department has consulted with FEMA and USDA and

solicited comments on proposed changes to the regulations from the

States. The majority of the States commented that the simplification of

the weekly monetary computation, in order to remove or reduce the

inequities described above, should have priority. The Department, FEMA

and USDA considered the comments and the Department has incorporated

many of the States' specific comments in the amendments to Sec. 625.6

described below, such as the payment of 50 percent of the average UC

amount as the minimum DUA amount and elimination of the current

provisions in Secs. 625.6(a) (2) through (5). The Department concurs

that the amendments should have priority and should be implemented as

rapidly as possible.

Changes to 20 CFR 625.6

Section 625.6 is amended in its entirety as set forth and discussed

below.

The heading of Sec. 625.6 is amended to read, Weekly Amount;

Jurisdictions; Reductions, which reflects the contents and provisions

of the section more accurately than the current heading.

Section 625.6(a) provides that the weekly amount of DUA for all

States, except the South Pacific island jurisdictions, shall be the

same as computed under the State UC law for regular compensation and

the amount so computed shall not exceed the maximum WBA for UC

authorized under the applicable State law. This is the same provision

as is currently in the first part of Sec. 625.6(a)(1). However, the

amendments add three new paragraphs to Sec. 625.6(a) that clarify and

simplify the computations made under this section and reduce or

eliminate the potential for improper DUA payments or fraudulent

applications.

Newly added paragraph (a)(1) reads nearly the same as the proviso

in current paragraph (a)(1). That is, the amended regulation continues

to provide that in computing an individual's DUA WBA, the qualifying

employment and wage [[Page 25563]] requirements of the applicable State

UC law and the benefit formula of the applicable State UC law shall be

applied, except for computations as provided under new paragraphs

(a)(2) or (b) (discussed below). The State UC law base period is no

longer applicable.

In addition, the provision, in current paragraph (a)(1), that wages

``shall not include employment or self-employment, or wages earned or

paid for employment or self-employment, which is contrary to or

prohibited by any Federal law'' is retained. For clarification, and as

an example of the application of this provision, new paragraph (a)(1)

cites section 3304(a)(14)(A) of the Federal Unemployment Tax Act

(hereafter ``FUTA'') (26 U.S.C. 3304(a)(14)(A)) as one of the Federal

law provisions which is included in this exclusion. The Department's

long-standing position on the administration of this FUTA provision as

it relates to services performed by an alien is set out in UIPLs No. 1-

86 (51 FR 10102, August 20, 1986), 12-87 (54 FR 10102), 12-87, Change 1

(54 FR 10113) and 6-89 (54 FR 10116), all published on March 9, 1989.

The Department's position and applicability of section 3304(a)(14)(A),

FUTA, to the DUA Program was also set forth in the preamble to the DUA

final rule published May 16, 1991 (56 FR 22800).

Newly added paragraph (a)(2) provides that for all individuals,

whether they are self-employed, or are individuals with a combination

of income from self-employment and remuneration for services performed

for another, or are wage earners only, the base period to be utilized

to determine the DUA WBA shall be the most recent tax year that has

ended for the individual prior to the individual's unemployment that

was a direct result of the major disaster. The reasons for this

amendment are as follows.

Most State UC laws provide that the base period utilized in

determining monetary entitlement for a UC claim is the first four of

the five completed calendar quarters preceding the filing quarter.

Therefore, if an individual becomes unemployed in April, May, or June,

the base period is the prior calendar year, which, for individuals, is

also a tax year. If an individual becomes unemployed in a later quarter

in the current year, it results in a different base period which, for

some individuals, means that a projection of income has to be made for

the quarters outside the most recent tax year. This will result in a

projection which may or may not be accurate. An individual who became

unemployed in the January-March quarter would have to provide

information from a tax year prior to the most recent calendar year in

order for the State agency to properly compute a DUA WBA. In addition,

the tax year for certain self-employed individuals, depending on filing

status, is different than a calender year. This causes additional

problems when projecting income for a State UC law base period.

Therefore, in order to reduce errors by eliminating income

projections and provide a more easily administered provision, the

Department has determined that the most recently completed tax year for

the individual preceding the individual's unemployment that was a

direct result of the major disaster will be the base period to be

utilized in computing the DUA WBA, rather than the State UC law base

period.

The self-employment income to be considered wages (as defined in

Sec. 625.2(u)) shall be all the net income that was reported on the tax

return that was dependent on the performance of services in all self-

employment. This provision eliminates problems that occurred where the

net income reported on the individual's tax year return for the year

preceding the beginning date of the disaster under the instructions in

UIPL No. 35-87 did not coincide with the State UC law base period. The

individual's projection of net income for the periods outside the tax

year may not have included all self-employment net income from services

performed in two or more businesses, but only the net income from those

businesses affected by the disaster. This may have limited State agency

use of base period self-employment in computing a DUA WBA. This

inconsistency could occur because Sec. 625.2(t) defines ``unemployed

self-employed individual'' as an individual who was self-employed in or

was to commence self-employment in the major disaster area at the time

the major disaster began, and whose principal source of income and

livelihood is dependent upon that self-employment, and whose

unemployment is caused by a major disaster.

Inclusion of all net income derived from the performance of

services in all self-employment parallels the inclusion of all wages

earned in covered employment by wage earners on a State UC claim and in

covered and noncovered employment on a DUA claim by an unemployed

worker, and is in accordance with the provisions of Sec. 625.6(a)(1).

Using all net income from the performance of all services in self-

employment will lessen the burden on State agency personnel to perform

analytical activities more associated with income tax auditors in

attempting to split out income from one business when reviewing tax

returns or other business records. Base period (tax year) income from

sources not requiring the performance of services, such as interest,

dividends, and capital gains from the sale of investments (or stock

portfolios) is not to be included for self-employed individuals, just

as it is not included as wages in determining entitlement to UC, since

no services are performed. Since these sources of income are reported

separately on the tax return, their exclusion from base period income

is not difficult.

However, any net income during the tax year base period derived

from the business, such as income derived when a self-employed farmer

receives crop insurance or disaster relief payments for the loss of a

crop, is income that must be included. This is because such payments

are made in lieu of income that would have been received from the

harvest of the crops.

Inclusion of all net income from the performance of services in

self-employment derived from any business carried on by such individual

follows the definition of ``net earnings from self-employment'' in

section 1402(a) of the Internal Revenue Code of 1986 (26 U.S.C.

1402(a)).

The Department also recognizes that some individuals may not have

completed their tax returns at the time of their unemployment due to

the major disaster; however, such individuals will be entitled to a DUA

WBA determined in accordance with paragraph (e)(3) of this section,

discussed below.

In addition, the Department recognizes that to utilize wages in the

most recently completed tax year for the individual preceding the

individual's unemployment as a direct result of the major disaster as

the base period for computing a DUA WBA under Sec. 625.6(a) could

result in the use of wages not representative of the income an

individual is currently receiving at the time his/her unemployment

begins. The most recently completed tax year base period may result in

some individuals receiving a lower DUA WBA than if more current wages

were used. However, since all individuals who are fully employed or

self-employed prior to their unemployment as a direct result of the

major disaster will, at a minimum (unless reduced for disqualifying

income or because of pre-disaster partial employment or partial self-

employment), receive 50 percent of the average State UC weekly amount

as their DUA WBA, they will receive a reasonable DUA WBA that will

permit them to temporarily provide for their [[Page 25564]] needs.

Therefore, no individual will suffer significant harm. Also, the most

recently completed tax year base period provision was established in

the interest of simplifying the administration of the DUA Program and

reducing or eliminating the potential for determining an incorrect or

improper DUA WBA.

The Department, however, invites interested parties to suggest

provisions that would use more recent wages in an alternate base period

where this would provide a higher DUA WBA than the use of wages in the

most recently completed tax year. Specifically, comments are requested

on what would be an appropriate alternate base period without having to

utilize income projections and in which the wages (net income for the

self-employed) could be easily substantiated by the individual and

easily verified by the State agency.

Newly added paragraph (a)(3) of this section provides a rule for

the allocation of income in cases where several family members work in

a business. It provides that, as of the date of filing an initial

application for DUA, if family members who are over the age of

majority, as defined under the statutes of the applicable State, were

customarily or routinely employed or self-employed as a family unit or

in the same self-employment business prior to the date the individuals

became unemployed as a direct result of the major disaster, the wages

from such employment or net income from self-employment shall be

allocated equally among such adult family members for purposes of

computations of the DUA WBA. There is an exception provided. If the

documentation substantiating employment or self-employment and wages

from such employment or self-employment, submitted in accordance with

new Sec. 625.6(e), justifies a different allocation, it will be used

rather than the equal allocation.

The Department recognizes that in many self-employment ventures

adult members of a family, particularly husbands and wives, may jointly

own the business or trade and share equally in performing services

resulting in the success or failure of the business, yet may never have

formally entered into a partnership or filed form 1065 or schedule K-1,

which reflects the distribution of income, with the Internal Revenue

Service as part of their tax return. Therefore, the Department

concludes that to restrict the allocation of income only to those

situations where a partnership exists, as proven by the schedule K-1,

is overly restrictive and has prevented the payment of DUA to

individuals otherwise entitled.

In addition, the Department recognizes that in certain occupations,

particularly in agriculture, it is common for family members to work as

a unit for an employer, yet only one member of the family is paid by

the employer. The family member that is paid then divides the wages

between the other family members or uses such wages to provide for all

the family members' needs and expenses. Paragraph (a)(3) clarifies the

Department's position that all adult family members who performed

services should be treated equally in the allocation of income for

purposes of computing a DUA weekly amount.

The term ``family,'' as used for purposes of determining a DUA WBA,

is not limited to the traditional family of husband, wife, and

children, but includes any family members related by blood, adoption,

or marriage who customarily work as a family unit.

However, the Department also recognizes that members of a family

under the age of majority often perform services in employment and

self-employment for family units or family businesses, particularly in

the agricultural industry. Such employment or self-employment is

usually performed during periods such individuals are not attending

school and may be full-time during vacation or between term periods,

and part-time or not at all during times that school is in session. The

fact that such individuals are under the age of majority does not, in

itself, mean these individuals are not entitled to DUA. These

individuals would be entitled to DUA if they meet the definition of

unemployed worker or unemployed self-employed individual at Secs. 625.2

(s) and (t) and the eligibility requirements for a week of unemployment

in Sec. 625.4.

For these reasons, paragraph (a)(3) also provides that, for

purposes of computing a DUA WBA for an individual under the age of

majority, the actual wages earned or received during the base period in

employment or self-employment are utilized, rather than an equal

allocation of the wages as provided for family members over the age of

majority.

The Department also recognizes that in many family businesses,

particularly in the agricultural industry, individuals under the age of

majority may not be paid wages as payment for services that are

performed, but may be paid an allowance or receive a percentage of the

proceeds resulting from a product or livestock that is sold. Therefore,

such individuals may not have any tax returns, bank accounts, or other

business records to support their statement of employment and earnings,

as would the business owner or employer. Such individuals may provide

an affidavit from an adult family member, which is duly certified

before an official, such as a notary public, or have the adult family

member provide a signed statement, under penalty of perjury, to a State

agency representative, substantiating that they performed services and

received the amount of the allowance or proceeds as payment. If the

individuals have other documentation substantiating their employment,

the affidavit or adult family member statement is not necessary. In

these cases, the State agency must give careful consideration to

whether the individual meets the definitions of ``unemployed worker''

or ``unemployed self-employed individual'' in Secs. 625.2 (s) and (t),

respectively.

Newly added Sec. 625.6(b) provides that if the DUA weekly amount

computed under paragraph (a) for an individual is less than 50 percent

of the average weekly payment of regular UC paid in the State, or if an

individual has insufficient or no wages in the base period to compute a

DUA weekly amount, the individual shall be entitled to a weekly amount

equal to 50 percent of the average weekly UC payment in the State. Any

individual whose weekly DUA amount is determined under paragraph (b)

must submit documentation to substantiate employment or self-

employment, or wages paid or earned for such employment or self-

employment, or documentation to substantiate that the disaster

prevented planned commencement of employment or self-employment. Such

documentation must be submitted within 21 calendar days from the date

of application for DUA. If such individual fails to provide such

documentation, he/she will be denied DUA.

This provision provides a significant increase in the minimum DUA

amount payable (in most cases, from the minimum payable under the State

UC law to 50 percent of the average payable). In addition, it reduces

the inconsistency between the DUA weekly amount established for the

South Pacific island jurisdictions (as discussed previously) and the

other States. Elimination of the inconsistency is discussed below. A

remaining inconsistency is that the South Pacific island jurisdictions

use a uniform weekly DUA amount, while the other States treat the

proposed DUA minimum as a floor that can be exceeded if justified by

prior earnings. In addition, newly added Sec. 625.6(b) also ensures

that individuals having minimal [[Page 25565]] earnings ($1.00 up to

the minimum needed to qualify under the State UC law), or no wages (no

net income in the case of the self-employed), will be entitled to a

weekly DUA amount.

The Department has determined that to set the minimum weekly DUA

amount at 50 percent of the average weekly UC amount paid in a State is

sufficient to permit unemployed individuals to temporarily provide for

the necessities of living. Workers whose prior wages justify a higher

weekly DUA amount will receive more, up to the State's maximum weekly

amount for regular compensation. Most State UC laws establish the

weekly UC amounts based on a percentage of the average weekly wage paid

in the State, taking into consideration the labor force, geography and

other factors unique to the State. Therefore, the Department has

determined that a minimum DUA payment in a State equal to 50 percent of

the average UC weekly amount paid in the State is an amount that will

allow for the temporary needs of unemployed individuals to provide for

certain necessities of living, which, as discussed below, may be

reduced for individuals who are customarily or routinely employed or

self-employed less than full-time.

Section 625.6(b)(1) provides that if an individual was customarily

or routinely employed or self-employed less than full-time prior to

his/her unemployment as a direct result of the major disaster, such

individual's weekly amount shall be determined based on the percentage

of time the individual was employed or self-employed compared to the

customary and usual hours per week that would constitute full-time

employment or self-employment in the occupation. The State agency will

determine what constitutes full-time employment based on information

requested from the applicant and State agency records or occupational

and labor market information. An exception is provided if an individual

employed or self-employed less than full-time has base period earnings

that would result in the computation of a DUA WBA under paragraph (a)

that is less than 50 percent of the average UC weekly amount but is

greater than the DUA WBA computed under paragraph (b)(1). In this case,

the individual will be paid the higher weekly amount.

The purpose of this provision is to prevent payment of 50 percent

of the average UC weekly amount to an individual who was employed or

self-employed less than full-time prior to the major disaster. This

provision prevents an individual from receiving a DUA WBA exceeding the

wages received for such employment or self-employment. The Department

recognizes, and FEMA and the State agencies have also expressed

concern, that if the minimum DUA weekly amount is too high, it works as

a disincentive for the individual to seek and return to work. For

example, assume a college student works 20 hours per week at the hourly

wage of $4.25 for a weekly wage of $85.00. This individual becomes

unemployed as a direct result of a major disaster, and is dependent

upon the employment as his/her principal source of income and

livelihood. If the minimum DUA weekly payment (50 percent of the

average UC payment) is $90.00 per week in the State, such amount

exceeds the weekly wages for his/her employment. Therefore, if 40 hours

per week is considered full-time employment for the occupation by the

State agency, the individual's DUA weekly amount would be established

at $45.00 (20 hours is 50 percent of 40 hours, and 50 percent of $90.00

equals $45.00). That amount is a more equitable income replacement for

the services performed and provides an income to the individual in the

same kind of relationship to the income received from the job, as a

full weekly amount is to the income received by an individual who

worked full-time.

Section 625.6(b)(2) provides that if the DUA WBA computed under

paragraph (b)(1) is not an even dollar amount, the amount will be

rounded in accordance with the rounding provisions for regular UC under

the applicable State law.

Sections 625.6 (c) and (d) are redesignated from current paragraphs

(b) and (c) and otherwise remain unchanged. These paragraphs provide

for determining the DUA WBA for the South Pacific island jurisdictions.

The provisions of newly added paragraphs 625.6 (e) and (f) (discussed

below) also are applicable to individuals filing for DUA in those South

Pacific island jurisdictions.

The Department is considering issuing a notice of proposed

rulemaking, which would propose two amendments to Sec. 625.6 to reduce

the DUA WBA in the South Pacific island jurisdictions. One amendment

would provide that the DUA WBA established under Sec. 625.6(c) for Guam

and the Commonwealth of the Northern Mariana Islands would be more akin

to the amount determined under paragraph (b) for the remainder of the

States (i.e., 50 percent of the average weekly UC amount paid in each

State). For the remainder of the jurisdictions at Sec. 625.6(d), the

DUA WBA would remain at 50 percent of the area-wide average of weekly

wages paid to individuals in those jurisdictions. Amending Sec. 625.6

in accordance with the above proposal would eliminate the inconsistency

of unemployed workers in Guam and the Commonwealth of the Northern

Mariana Islands receiving a higher DUA WBA than many unemployed workers

in the other States.

The second proposed amendment would set forth in Sec. 625.6(b)(1)

that an individual in any South Pacific island jurisdiction would be

subject to a reduction to his/her determined DUA WBA if he/she were

employed or self-employed less than full-time prior to his/her

unemployment as a direct result of the major disaster. The reason for

including South Pacific islanders under Sec. 625.6(b)(1) is to achieve

consistency and uniformity across jurisdictions.

The Department has decided not to provide for the above amendments

in this interim final rule because to do so would reduce benefits to

some individuals in the South Pacific island jurisdictions, should a

major disaster be declared, without notice and an opportunity for

comments prior to the effective date of the rule, which is the date of

publication.

Newly added Sec. 625.6(e) sets forth that the State agency shall

immediately determine a DUA WBA under the provisions of paragraphs (a)

through (d) based on the individual's statement of employment or self-

employment and the wages earned or paid for each employment or self-

employment. In addition, an immediate determination of a DUA WBA will

be made if, at the time of filing for DUA, the individual submits

documentation substantiating employment or self-employment or wages

earned or paid for such employment or self-employment, or if the State

agency has records of employment or self-employment and wages earned or

paid. An immediate determination shall also be made based on the

individual's statement or in conjunction with the submittal of

documentation in those cases where the individual was to commence

employment or self-employment on or after the date the major disaster

began but was prevented from doing so as a direct result of the major

disaster.

Section Sec. 625.6(e)(1) provides that if entitlement is based only

on the individual's statement, the individual must furnish

documentation to substantiate such employment or self-employment and/or

wages earned or paid for such employment or self-employment. In

addition, documentation must be submitted in those cases where the

individual was to commence employment or self-employment at the time of

the disaster, but was prevented from commencing it [[Page 25566]] as a

direct result of the major disaster. The documentation must be

submitted within 21 calendar days of the filing of the DUA initial

application.

Section Sec. 625.6(e)(2) provides that if an individual fails to

submit, within 21 days, sufficient documentation to establish that he/

she was employed or self-employed in the major disaster area prior to

his/her unemployment as a direct result of the major disaster, or was

to commence employment or self-employment on or after the date the

major disaster began but was prevented from doing so as a direct result

of the disaster, the individual shall be ineligible for the payment of

DUA for any week of unemployment due to the major disaster. In

addition, if the individual received payments of DUA for any weeks of

unemployment prior to the date of the determination of ineligibility,

such weeks shall be considered overpaid and a determination will be

issued establishing the overpayment. The State agency shall also

consider whether the individual should be subject to a disqualification

for fraudulently filing an initial application for DUA.

The primary purpose for these provisions (Secs. 625.6(e)(1) and

(e)(2)) is to provide for the prompt payment of benefits to those

affected by a major disaster while also protecting against fraudulent

claims for DUA. The Department's position is that, given the

disruptions caused by a major disaster, it is important to provide

financial relief in affected areas as quickly as possible. It also is

necessary to be sure that benefits are being paid only to those who are

eligible for them. Thus, the regulations provide for the quick

determination and payment of benefits based on the applicant's

representation. Once conditions have stabilized, however, it is

reasonable to require documentation substantiating that an individual

meets the eligibility conditions, i.e., was employed or self-employed

or was to commence employment or self-employment in the disaster area

at the time he/she became unemployed as a direct result of the major

disaster. The documentation to prove employment or self-employment

would not have to consist of detailed income data, such as income tax

records or W-2 forms, which may have been lost or destroyed because of

the disaster, but could, for example, simply consist of a statement

from a bank that the individual had a business account or an account

with payroll deposit, or a copy of a title or deed to property, or any

other simple evidence that could easily be obtained within 21 days. In

those cases where an individual was to commence employment or self-

employment, the documentation could simply consist of a statement from

the employer indicating the date employment was to start or when a

self-employment contract for services was to start.

Section 625.6(e)(3) provides that, for purposes of DUA WBA computed

under paragraph (a), if an individual submits documentation to verify

his/her employment or self-employment within 21 calendar days of the

filing of the initial application for DUA, but not documentation to

support his/her statement of wages earned or paid during the base

period, the DUA WBA shall be immediately redetermined in accordance

with the provisions in paragraph 625.6(b). This includes those

instances where an individual has not filed a tax return for the most

recent tax year that has ended.

The purpose of paragraph (e)(3) is to ensure that if an individual

has stated that he/she has earnings that result in a computation of a

weekly DUA amount higher than 50 percent of the average UC amount paid

in the State, the individual must support the statement by providing

documentation of his/her earnings within a reasonable time. This rule

will prevent a significant amount of incorrect or improper payments

from occurring and prevent a large overpayment from being established

against the individual. The Department views 21 calendar days as a

reasonable time frame for the individual to contact sources and obtain

acceptable proof of income. Examples of acceptable forms of proof are

bank records, employer statements of earnings, income tax preparer

copies of documents, and State and/or Federal income tax returns.

An individual who planned to commence employment or self-employment

but was prevented because of the major disaster would have to produce

the same forms of proof as other individuals if the individual had base

period employment. However, the Department recognizes that many

individuals who were about to commence employment or self-employment

may not have had any employment prior to the date of unemployment. Such

individuals could only be determined entitled to a weekly amount under

the provisions of paragraph (b) of this section. The Department also

recognizes that these individuals may have expected to have had

earnings that would have resulted in a DUA WBA higher than 50 percent

of the average UC weekly amount, had they been included in a base

period. However, the Department's position is that there is no basis to

project what the individual might have received in future earnings and

apply such amount to the base period utilized for computations under

Sec. 625.6(a). There is no assurance the individual would have the

earnings projected for various reasons such as closure of the business

or termination from employment, or, in the case of the self-employed,

business expenses may exceed projections, or income may not result as

planned. In other words, individuals who were prevented from commencing

employment or self-employment have not proven the same attachment to

the workforce as have individuals who were employed or self-employed

prior to their unemployment as a direct result of the major disaster.

Therefore, the payment of 50 percent of the average UC weekly amount to

an individual who had no income prior to the employment or self-

employment he/she was to commence is reasonable.

If an individual fails to submit proof within 21 days, the State

agency generally would not have processed more than three weeks of

payments of DUA at the higher amount; hence, any overpayment

established as a result of the recomputation would be minimal and could

be more readily offset against future amounts payable, causing minimal

hardship to the individual. Conversely, the applicant's records

submitted within 21 calendar days may result in the individual being

entitled to a higher DUA WBA and an adjustment must be made for the

underpaid weeks. This rule will also provide such individuals with a

steadier income stream.

Section 625.6(e)(4) provides that if an individual has had his/her

DUA WBA redetermined in accordance with paragraph (e)(3) because the

required wage documentation was not submitted within 21 calendar days,

such individual may have his/her DUA WBA redetermined upon submittal of

documentation prior to the end of the disaster assistance period to

substantiate that the wages earned or paid during the base period would

be sufficient to compute a DUA WBA higher than was redetermined under

paragraph (b). This provision will benefit all individuals who were

unable to obtain and submit base period wage documentation with 21

days. This provision will particularly accommodate those individuals

who had not filed a tax return at the time of application for DUA by

allowing such individuals up to 26 weeks to submit a copy of a tax

return filed for the most recent tax year. Any higher weekly amount

determined would be applicable to all weeks for which the individual

was eligible for the payment of DUA. [[Page 25567]]

Newly added Sec. 625.6(f)(1) sets forth, for partial and part-total

unemployed workers and unemployed self-employed individuals, the

current methodology that is prescribed in Sec. 625.6(d) for reducing

the weekly amount of DUA payable. It requires that the weekly amount of

DUA payable shall be reduced (but not below zero) by the amount of

wages earned in that week as determined by applying to such wages the

earnings allowance for partial or part-total employment prescribed in

the applicable State UC law for partial or part-total employment by

individuals received regular UC.

Newly added Sec. 625.6(f)(2) provides that the weekly DUA amount

payable to an unemployed self-employed individual shall also be reduced

(but not below zero) by the full amount of any income received during

the week that was based on the performance of services in self-

employment by applying the earnings reduction allowance provided in

paragraph (f)(1). Paragraph (f)(2) also provides that, notwithstanding

the definition of ``wages'' at Sec. 625.2(u), the term ``any income''

for purposes of this paragraph means gross income.

The basis for the reductions in paragraph (f)(2) of this section

derive from the fact that the definition of a ``week of employment''

for an unemployed self-employed individual at Sec. 625.2(w)(2) does not

take into consideration that in the case of many self-employed,

particularly farmers, all income for year round performance of services

may be paid in one or two weeks. The instructions in UIPL No. 35-87

attempted to reconcile the problem by having the individual project

his/her net income for the year, then prorate such amount to each week

and deduct the amount from the DUA WBA for each week claimed. The

result of this, as discussed previously, was that, in many cases, the

projected prorated weekly amount exceeded the DUA WBA and the

individual received no DUA, even though such individual was unemployed

and had no income from any source.

The Department believes it is far more equitable, and will provide

weekly DUA payments to a greater number of individuals, to deduct from

the DUA WBA the gross earnings received during a week that were or are

derived from the performance of services in self-employment, than to

attempt to have the individual determine or project net earnings for a

year from the income and then prorate such annual figure to each week.

Application of this new provision means, for example, in the case

of a farmer, that if the farmer sold some product(s) during a week and

received $30,000.00 in gross income, the individual would be ineligible

for DUA for that week only, and then he/she could continue to receive

DUA in subsequent weeks provided the eligibility requirements of

Sec. 625.4 are met. However, if the net income for tax purposes to be

derived from the $30,000.00, plus any additional projected net income

to be received during the tax year, were prorated to 52 weeks and

deducted from the amount of DUA payable, it may mean the individual is

not entitled to any DUA for any week because of excessive earnings each

week. Likewise, if a self-employed individual performed services prior

to becoming unemployed due to the major disaster and is receiving

monthly installment payments of, for example, $50.00, such amount would

be deducted from the DUA WBA during the week received.

The Department recognizes that application of the reduction

provisions in paragraph (f)(2) of Sec. 625.6 will result in no

reduction being made for weeks of unemployment after the individual's

unemployment as a direct result of the major disaster where the

individual performs less than full-time self-employment but has no

income during the week. Therefore, the Department is considering

issuing a notice of proposed rulemaking, which would amend Sec. 625.6

to reduce the DUA WBA based on the hours an individual performed less

than full-time services in self-employment during the week compared to

the individual's usual or customary full-time hours performing

services. This amendment is not being made in this interim final rule

because self-employed individuals affected by such an amendment would

receive less benefits without opportunity for comment prior to the

effective date of this rule should a major disaster be declared.

Publication in Interim Final; Effective Date

The Department has determined, pursuant to 5 U.S.C. 553(b)(B), that

good cause exists for publishing the amendments to 20 CFR 625.6 as an

interim final rule with a post-publication comment period, because a

pre-publication comment period is impracticable and contrary to the

public interest. It is impractical because major disasters continue to

occur, which means that thousands of individuals will again be

unemployed and applying for DUA if areas in the States or entire States

are declared major disaster areas by the President. To not have the

regulations in place at that time would be contrary to the public

interest because of the inconsistencies and unduly restrictive

provisions in the current regulations. In addition, there is little

likelihood that the majority of any potential beneficiaries will object

to the changes since they provide more equitable and, in most cases,

greater benefits.

For all of the reasons stated above, the Department has determined,

pursuant to 5 U.S.C. 553(d)(3), that good cause exists for making the

amendments to 20 CFR 625.6 effective upon publication in the Federal

Register. Such amendments are applicable to all major disasters

declared by the President on or after the date of publication and will,

therefore, cover any major disaster in the spring or summer.

Historically, these are the seasons of the year when most major

disasters occur because of the prevalence of severe storms, floods,

tornadoes, and hurricanes.

Drafting Information

This document was prepared under the direction and control of the

Director, Unemployment Insurance Service, Employment and Training

Administration, U.S. Department of Labor, 200 Constitution Avenue, NW.,

Washington, DC 20210: Telephone (202) 219-7831 (this is not a toll-free

number).

Classification--Executive Order 12866

The interim final rule in this document is classified as a

``significant regulatory action'' under Executive Order 12866 on

Federal Regulations. It may: (1) Materially alter the budgetary impact

of entitlements or the rights and obligations of recipients thereof; or

(2) raise novel legal or policy issues arising out of legal mandates

and the President's priorities. It is not likely to result: (3) in

having an annual effect on the economy of $100 million or more; or (4)

create a serious inconsistency or interfere with action taken or

planned by another agency.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.

3501 et seq., approval has been obtained from the Office of Management

and Budget (OMB) for the recordkeeping and reporting requirements under

20 CFR 625.16(a) for the DUA forms ETA 90-2, 81, 81A, 82, 83, and 84.

The OMB control number for the 90-2 is 1205-0234, and for the 81, 81A,

82, 83, and 84 it is 1205-0051. OMB approval has also been obtained for

the recordkeeping and reporting required under 20 CFR

[[Page 25568]] 625.19(b) under OMB control number 1205-0051.

Regulatory Flexibility Act

No regulatory flexibility analysis is required where the rule

``will not * * * have a significant economic impact on a substantial

number of small entities'' (5 U.S.C. 605(b)). The definition of the

term ``small entity'' under 5 U.S.C. 601(6) does not include States.

Since these regulations involve an entitlement program administered by

the States, and are directed to the States, no regulatory flexibility

analysis is required. The Secretary has certified to the Chief Counsel

for Advocacy of the Small Business Administration to this effect.

Catalog of Federal Domestic Assistance Number

This program is listed in the Catalog of Federal Domestic

Assistance at No. 17. 225, ``Disaster Unemployment Assistance

(DUA).''

Lists of Subjects in 20 CFR Part 625

Disaster Unemployment Assistance, Labor, Reemployment services,

Unemployment compensation.

Signed at Washington, DC, on May 4, 1995.

Doug Ross,

Assistant Secretary of Labor.

For the reasons set out in the preamble, part 625 of title 20, Code

of Federal Regulations, is amended as set forth below.

PART 625--DISASTER UNEMPLOYMENT ASSISTANCE

1. The authority for part 625 continues to read as follows:

Authority: 42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5201(a);

Executive Order 12673 of March 23, 1989 (54 FR 12571); delegation of

authority from the Director of the Federal Emergency Management

Agency to the Secretary of Labor, effective December 1, 1985 (51 FR

4988); Secretary's Order No. 4-75 (40 FR 18515).

2. Section 625.6 is revised to read as follows:

Sec. 625.6 Weekly amount; jurisdictions; reductions.

(a) In all States, except as provided in paragraphs (c) and (d) of

this section, the amount of DUA payable to an unemployed worker or

unemployed self-employed individual for a week of total unemployment

shall be the weekly amount of compensation the individual would have

been paid as regular compensation, as computed under the provisions of

the applicable State law for a week of total unemployment. In no event

shall such amount be in excess of the maximum amount of regular

compensation authorized under the applicable State law for that week.

(1) Except as provided in paragraph (a)(2) or (b) of this section,

in computing an individual's weekly amount of DUA, qualifying

employment and wage requirements and benefit formula of the applicable

State law shall be applied; and for purposes of this section,

employment, wages, and self-employment which are not covered by the

applicable State law shall be treated in the same manner and with the

same effect as covered employment and wages, but shall not include

employment or self-employment, or wages earned or paid for employment

or self-employment, which is contrary to or prohibited by any Federal

law, such as, but not limited to, section 3304(a)(14)(A) of the Federal

Unemployment Tax Act (26 U.S.C. 3304(a)(14)(A)).

(2) For purposes of paragraph (a)(1) of this section, the base

period to be utilized in computing the DUA weekly amount shall be the

most recent tax year that has ended for the individual (whether an

employee or self-employed) prior to the individual's unemployment that

was a direct result of the major disaster. The self-employment income

to be treated as wages for purposes of computing the weekly amount

under this paragraph (a) shall be the net income reported on the tax

return of the individual as income from all self-employment that was

dependent upon the performance of services by the individual. If an

individual has not filed a tax return for the most recent tax year that

has ended at the time of such individual's initial application for DUA,

such individual shall have a weekly amount determined in accordance

with paragraph (e)(3) of this section.

(3) As of the date of filing an initial application for DUA, family

members over the age of majority, as defined under the statutes of the

applicable State, who were customarily or routinely employed or self-

employed as a family unit or in the same self-employment business prior

to the individuals' unemployment that was a direct result of the major

disaster, shall have the wages from such employment or net income from

the self-employment allocated equally among such adult family members

for purposes of computing a weekly amount under this paragraph (a),

unless the documentation to substantiate employment or self-employment

and wages earned or paid for such employment or self-employment

submitted as required by paragraph (e) of this section supports a

different allocation. Family members under the age of majority as of

the date of filing an initial application for DUA shall have a weekly

amount computed under this paragraph (a) based on the actual wages

earned or paid for employment or self-employment rather than an equal

allocation.

(b) If the weekly amount computed under paragraph (a) of this

section is less than 50 percent of the average weekly payment of

regular compensation in the State, as provided quarterly by the

Department, or, if the individual has insufficient wages from

employment or insufficient or no net income from self-employment (which

includes individuals falling within paragraphs (a)(3) and (b)(3) of

Sec. 625.5) in the applicable base period to compute a weekly amount

under paragraph (a) of this section, the individual shall be determined

entitled to a weekly amount equal to 50 percent of the average weekly

payment of regular compensation in the State.

(1) If an individual was customarily or routinely employed or self-

employed less than full-time prior to the individual's unemployment as

a direct result of the major disaster, such individual's weekly amount

under this paragraph (b)(1) shall be determined by calculating the

percent of time the individual was employed or self-employed compared

to the customary and usual hours per week that would constitute the

average per week hours for year-round full-time employment or self-

employment for the occupation, then applying the percentage to the

determined 50 percent of the average weekly amount of regular

compensation paid in the State. The State agency shall utilize

information furnished by the applicant at the time of filing an initial

application for DUA and any labor market or occupational information

available within the State agency to determine the average per week

hours for full-time employment or self-employment for the occupation.

If the weekly amount computed for an individual under this paragraph

(b)(1) is less than the weekly amount computed under paragraph (a) of

this section for the individual, the individual shall be entitled to

the higher weekly amount.

(2) The weekly amount so determined under paragraph (b)(1) of this

section, if not an even dollar amount, shall be rounded in accordance

with the applicable State law.

(c) In the Territory of Guam and the Commonwealth of the Northern

Mariana Islands, the amount of DUA payable to an unemployed worker or

unemployed self-employed individual for a week of total unemployment

shall be the average of the payments of regular compensation made under

all State laws referred to in Sec. 625.2(r)(1)(i) for weeks of total

unemployment in the first four of [[Page 25569]] the last five

completed calendar quarters immediately preceding the quarter in which

the major disaster began. The weekly amount so determined, if not an

even dollar amount, shall be rounded to the next higher dollar.

(d) In American Samoa, Federated States of Micronesia, Republic of

the Marshall Islands and the Trust Territory of the Pacific Islands,

the amount of DUA payable to an unemployed worker or unemployed self-

employed individual for a week of total unemployment shall be the

amount agreed upon by the Regional Administrator, Employment and

Training Administration, for Region IX (San Francisco), and the Federal

Coordinating Officer, which shall approximate 50 percent of the area-

wide average of the weekly wages paid to individuals in the major

disaster area in the quarter immediately preceding the quarter in which

the major disaster began. The weekly amount so determined, if not an

even dollar amount, shall be rounded to the next higher dollar.

(e) The State agency shall immediately determine, upon the filing

of an initial application for DUA, a weekly amount under the provisions

of paragraphs (a) through (d) of this section, as the case may be,

based on the individual's statement of employment or self-employment

preceding the individual's unemployment that was a direct result of the

major disaster, and wages earned or paid for such employment or self-

employment. An immediate determination of a weekly amount shall also be

made where, in conjunction with the filing of an initial application

for DUA, the individual submits documentation substantiating employment

or self-employment and wages earned or paid for such employment or

self-employment, or, in the absence of documentation, where any State

agency records of employment or self-employment and wages earned or

paid for such employment or self-employment, justify the determination

of a weekly amount. An immediate determination shall also be made based

on the individual's statement or in conjunction with the submittal of

documentation in those cases where the individual was to commence

employment or self-employment on or after the date the major disaster

began but was prevented from doing so as a direct result of the

disaster.

(1) In the case of a weekly amount determined in accordance with

paragraph (e) of this section, based only on the individual's statement

of earnings, the individual shall furnish documentation to substantiate

the employment or self-employment or wages earned from or paid for such

employment or self-employment or documentation to support that the

individual was to commence employment or self-employment on or after

the date the major disaster began. In either case, documentation shall

be submitted within 21 calendar days of the filing of the initial

application for DUA.

(2) Any individual who fails to submit documentation to

substantiate employment or self-employment or the planned commencement

of employment or self-employment in accordance with paragraph (e)(1) of

this section, shall be determined ineligible for the payment of DUA for

any week of unemployment due to the disaster. Any weeks for which DUA

was already paid on the application prior to the date of the

determination of ineligibility under this paragraph (e)(2) are overpaid

and a determination shall be issued in accordance with Sec. 625.14(a).

In addition, the State agency shall consider whether the individual is

subject to a disqualification for fraud in accordance with the

provisions set forth in Sec. 625.14(i).

(3) For purposes of a computation of a weekly amount under

paragraph (a) of this section, if an individual submits documentation

to substantiate employment or self-employment in accordance with

paragraph (e)(1), but not documentation of wages earned or paid during

the base period set forth in paragraph (a)(2) of this section,

including those cases where the individual has not filed a tax return

for the most recent tax year that has ended, the State agency shall

immediately redetermine the weekly amount of DUA payable to the

individual in accordance with paragraph (b) of this section.

(4) Any individual determined eligible for a weekly amount of DUA

under the provisions of paragraph (e)(3) of this section may submit

necessary documentation to substantiate wages earned or paid during the

base period set forth in paragraph (a)(2) of this section, including

those cases where the individual has not filed a tax return for the

most recent tax year that has ended, at any time prior to the end of

the disaster assistance period. A redetermination of the weekly amount

payable, as previously determined under paragraph (b) of this section,

shall immediately be made if the wages earned or paid for services

performed in employment or self-employment reflected in such

documentation is sufficient to permit a computation under paragraph (a)

of this section of a weekly amount higher than was determined under

paragraph (b) of this section. Any higher amount so determined shall be

applicable to all weeks during the disaster assistance period for which

the individual was eligible for the payment of DUA.

(f)(1) The weekly amount of DUA payable to an unemployed worker or

unemployed self-employed individual for a week of partial or part-total

unemployment shall be the weekly amount determined under paragraph (a),

(b), (c) or (d) of this section, as the case may be, reduced (but not

below zero) by the amount of wages that the individual earned in that

week as determined by applying to such wages the earnings allowance for

partial or part-total employment prescribed by the applicable State

law.

(2) The weekly amount of DUA payable to an unemployed self-employed

individual for a week of unemployment shall be the weekly amount

determined under paragraph (a), (b), (c) or (d) of this section, as the

case may be, reduced (but not below zero) by the full amount of any

income received during the week for the performance of services in

self-employment, regardless of whether or not any services were

performed during the week, by applying the earnings allowance as set

forth in paragraph (f)(1) of this section. Notwithstanding the

definition of ``wages'' for a self-employed individual under

Sec. 625.2(u), the term ``any income'' for purposes of this paragraph

(f)(2) means gross income.

[FR Doc. 95-11617 Filed 5-10-95; 8:45 am]

BILLING CODE 4510-30-M