Unemployment Compensation for Federal Employees Excepted Employee Program; Unemployment Insurance Program Letters Implementing the Unemployment Compensation for Federal Employees Excepted Employee Program

DEPARTMENT OF LABOR

Employment and Training Administration

Unemployment Compensation for Federal Employees Excepted Employee

Program; Unemployment Insurance Program Letters Implementing the

Unemployment Compensation for Federal Employees Excepted Employee

Program

On January 6, 1996, Public Law 104-92 was enacted. Section 312 of

Title III of the Act created the Unemployment Compensation for Federal

Employees Excepted Employee Program (UCFE-EEP) effective January 2,

1996. Under the UCFE-EEP, Federal employees excepted from furlough and

who are not being paid due to a lapse in appropriations shall be deemed

to be totally separated from Federal service and eligible for

unemployment

[[Page 11872]]

compensation under the regular UCFE program with no waiting period to

accrue for eligibility.

In its role as principal in the UCFE-EEP, the Department of Labor

issued controlling guidance for the States and cooperating State

agencies in the operating instructions set forth in Unemployment

Insurance Program Letter (UIPL) No. 7-96, dated January 24, 1996, and

UIPL 7-96, Change 1, dated March 8, 1996. The States administer the

UCFE Program pursuant to agreements between the States and the

Secretary of Labor. Since the UCFE-EEP is a sub-program of the UCFE

Program, the same agreement applies.

The States and cooperating State agencies may not vary from the

operating instructions provided in UIPL 7-96 or UIPL 7-96, Change 1,

(or any subsequent or supplemental operating instructions), without the

prior approval of the Department of Labor. Therefore, UIPLs No. 7-96

and 7-96, Change 1, are published below assuring public notification of

the required procedures.

Signed at Washington, DC on March 14, 1996.

Timothy M. Barnicle,

Assistant Secretary.

Directive: Unemployment Insurance Program Letter No. 7-96

To: All State Employment Security Agencies

From: Mary Ann Wyrsch, Director, Unemployment Insurance Service

Subject: Unemployment Compensation for Federal Employees (UCFE)--

Federal Employees Excepted from Furlough (UCFE-Excepted Employees

Program)

1. Purpose. To advise State Employment Security Agencies (SESAs)

of the provisions of Section 312 of Title III of P.L. 102-94

(Continuing Resolution) concerning eligibility for UCFE for Federal

civilian employees excepted from furlough and to provide

instructions for implementing the legislation to ensure the timely

and accurate payment of benefits under the UCFE-Excepted Employee

Program (UCFE-EEP) and to provide fiscal and reporting instructions.

2. References. Title III of P.L. 102-94 (H.R. 1643) enacted

January 6, 1996; Subchapter I of chapter 85, title 5 of the United

States Code (5 U.S.C. 8501 et seq.) (UCFE law); 20 CFR Part 609

(UCFE regulations); Secretary of Labor's Agreement with States to

administer the UCFE and Unemployment Compensation for Ex-

servicemembers (UCX) Programs.

3. Background. Generally, whenever there is a lapse in

appropriations to fund a Federal government agency, the agency must

shut down activities and furlough its employees. However, there are

exceptions that permit certain employees to remain working to

continue selected functions. This includes those functions which the

failure to perform would result in an imminent threat to the safety

of human life or the protection of property, or where there is an

implied authority by statute that the function should continue.

----------------------------------------------------------------------

Rescissions

None.

Expiration Date: January 31, 1997.

Unless there are special provisions enacted after the furlough

which retroactively provide a different outcome, furloughed

employees may be eligible for UCFE under subchapter I of chapter 85

of title 5 of the United States Code. However, employees excepted

from such furloughs would neither be compensated (because of the

laps in appropriations) nor eligible for UCFE because they perform

services during the furlough period and would not be considered

unemployed or otherwise eligible for benefits in accordance with

State and Federal laws governing the payment of unemployment

compensation.

Section 312 of P.L. 102-94 changes and suspends some UCFE

eligibility requirements, through September 30, 1996, to convey UCFE

eligibility to employees excepted from furlough who are not being

paid due to a lapse in appropriations. These changes have, in

effect, created a sub-program of the regular UCFE program which will

be known as the UCFE-Excepted Employees Program (UCFE-EEP).

The purpose of the UCFE-EEP is to provide a weekly payment to

unpaid workers who are excepted from furlough through September 30,

1996, similar to that paid under the UCFE program to furloughed

individuals. To the extent possible these instructions so provide;

however, in certain instances provisions have had to be changed or

new provisions added in order to provide a weekly benefit amount to

individuals not otherwise eligible for UCFE in the absence of

Section 312.

This document provides the Department's interpretation of the

requirements of Section 312 and sets forth operating instructions

prescribed by the Department to guide the States in implementing the

provisions of the UCFE-EEP.

4. Legal Requirements of Section 312 of P.L. 102-94.

Section 312 provides--

Eligibility for Unemployment Compensation.-- Nothwithstanding

any other provisions of law, beginning on January 2, 1996, any

Federal employee who is excepted from furlough and is not being paid

due to lapse in appropriations shall be deemed to be totally

separated from Federal service and eligible for unemployment

compensation benefits under subchapter I of chapter 85 of title 5 of

the United States Code with no waiting period for such eligibility

to accrue.

Section 8502(b) of 5 U.S.C. 8501 et seq., as implemented by 20

CFR 609.9(a) of the Secretary's regulations implementing the UCFE

program, relative to State law applicability, provides that--

Except where the result would be inconsistent with the

provisions of the Act or this part or the procedures thereunder

prescribed by the Department, the terms and conditions of the

applicable State law which apply to claims for, and the payment of,

State unemployment compensation shall apply to claims for, and the

payment of, UCFE and claims for waiting period credit.

To effectuate the provisions of Section 312 of P.L. 102-94, it

is necessary to differ, in part, from the State and Federal laws

normally governing the payment of UCFE. The exceptions to the laws

and regulations necessitated by this section are described in

section 7. below.

5. Effective Dates. Section 312, the UCFE-EEP provisions, are

effective beginning January 2, 1996 and remain in effect through the

end of Federal Fiscal Year (FY) 1996 (September 30, 1996). However,

it has been determined that only weeks of unemployment beginning on

or after January 27, 1996 are compensable under the provisions of

Section 312 as the Continuing Resolution provided for retroactive

pay for excepted employees from December 16, 1995 through January 6,

1996.

The Continuing Resolution which provided funding for Federal

agencies that are without FY 1996 appropriations expires on January

26, 1996. In the absence of another Continuing Resolution or FY 1996

appropriations for Federal agencies not funded, the UCFE-EEP will

become operations for UCFE-EEP claims filed for a week beginning on

or after January 27, 1996 and thereafter as long as such conditions

exist, through a week ending on or before September 30, 1996.

6. Policy. The instructions in this document are issued to the

States and the cooperating State agencies and constitute controlling

guidance provided by the Department of Labor in its role as the

principal in the UCFE program. As agents of the United States, the

States and the cooperating State agencies may not vary from the

operating instructions in this directive (or any subsequent or

supplemental operating instructions) without the prior approval of

the Department of Labor.

7. The Department's Interpretation of the Requirements of

Section 312 of P.L. 102-94 and Controlling Implementation Guidance.

The Department's interpretation is that all State and Federal

laws and regulations applicable to UCFE claims are applicable to

UCFE-EEP claims, except where the result of such application would

be inconsistent with the provisions of Section 312 of P.L. 102-94,

as described below.

Section 312 deems all excepted employees to be totally

unemployed with respect to Federal service and eligible for

unemployment compensation ``under'' the UCFE law for as long as such

excepted states continues (but not beyond September 30, 1996)

without having to serve any waiting week. Thus, even excepted

employees having insufficient wages under the State law base period

must be determined eligible, as well as excepted employees outside

the United States (i.e., outside the States of the United States,

District of Columbia, Puerto Rico and the Virgin Islands).

a. Notwithstanding the requirements governing the determination

of entitlement under the UCFE/State UI laws, a weekly benefit amount

for UCFE-EEP claimants must be established for all Federal employees

excepted from furlough who are not being paid due to a lapse in

appropriations and

[[Page 11873]]

who file such claims. (This includes excepted employees who would

otherwise have insufficient base period employment and wages to

establish monetary entitlement and excepted employees performing

excepted services outside the United States). The weekly benefit

amount so determined could potentially be paid through a week ending

on or before September 30k 1996. Therefore, the State law or Federal

law maximum total benefit amount does not apply, since, potentially,

an individual could receive UCFE-EEP for a number of weeks that

exceed any State's maximum.

b. Monetary entitlement for UCFE-EEP claims must be determined

under the qualifying requirements for regular UCFE claims by the

State in which the excepted employee's official duty station is

located or deemed located for purposes of UCFE-EEP. To effect this

requirement, all base period wages covered under any State or

Federal law will be used in computing UCFE-EEP entitlement under the

State law.

The official duty station of an excepted employee who is

performing services outside of the United States is deemed to be the

State in which the headquarters of the Federal agency is located.

c. Charges resulting from the payment of UCFE-EEP benefits must

be charges to the Federal agency that designated the individual

filing such claim as a Federal excepted employee.

d. Section 312 of P.L. 102-94 does not apply to weeks of

unemployment during which an individual is not in excepted employee

status. Therefore, UCFE-EEP benefits are not payable for weeks

during which the individual is not in excepted employee status. In

order to receive benefits for such weeks, an individual must

establish or have a separate claim in existence with a remaining

balance under any of the other unemployment programs and meet all

the eligibility conditions for the receipt of regular benefits.

3. Section 312 prohibits the application of any State or Federal

law requiring availability for work or active work search to UCFE-

EEP claims, including weeks claimed during which the excepted

employee performed no excepted services because of annual or sick

leave.

f. UCFE-EEP benefit eligibility will be determined in accordance

with UCFE/UI requirements defining total unemployment and deductible

earnings with respect to any services other than excepted Federal

service performed by an excepted employee during a week claimed

since Section 312 provides only that excepted service is treated as

being totally unemployed.

g. The pension deduction provisions of State law applies to

benefits payable under the UCFE-EEP.

h. Section 312 prohibits the application of any State or Federal

law requiring an unpaid waiting week or period as a condition to

receiving compensation for a week claimed by an excepted employee.

8. UCFE-EEP Implementation Instructions Based on the

Department's Interpretation of Section 312 of P.L. 102-94. Operating

procedures to implement the requirements of Section 312 of P.L. 102-

94 as prescribed by the Department are set forth below.

a. UCFE-EEP Claims Filing Procedures. Most excepted employees

will be performing full-time excepted services, during the weeks

involved in the furlough period. Since most excepted employees will

be working during the normal workday, SESAs should utilize methods

for filing claims that will allow an excepted employee to remain at

his/her job site.

If a State agency waives regular reporting provisions with

respect to excepted employees, no issue will arise with respect to

20 CFR 609.9.

b. Initial Claims.

(1) New. When a UCFE-EEP claim is filed, the State agency will

issue a UCFE-EEP monetary determination based on all employment and

wages during the base period applicable to the claim, without regard

to separate monetary entitlement under any State or Federal law,

including UCFE.

c. Monetary Entitlement.

(1) Excepted Employee has Sufficient Base Period Wages to

Qualify. Monetary entitlement for UCFE-EEP claims will be determined

by the State in which the excepted employee's official duty station

is located or deemed located, based on all base period employment

covered under any State or Federal law to establish the weekly

benefit applicable to the UCFE-EEP claim.

The Federal agency that designates the individual as an excepted

employee has been instructed to furnish the State agency, of the

State in which the excepted employee's official duty Station is

located or deemed located, with the excepted employee's name, social

security number, annual Federal salary, base period employment and

wage information, home address, and effective date of excepted

designation, within the first week of the Federal agency furlough,

in accordance with the format and procedures established with the

State agency prior to the beginning of such furlough. In the event

of a delay of submittal of required information by such Federal

agency or if it is deemed to be more expeditious, the SESA may

utilize an affidavit to determine entitlement as outlined in ET

Handbook 391, Chapter XIII, page XIII-2.

To obtain information pertaining to employment and wages covered

under another State's law, the State agency should follow its

regular procedures to obtain information pertaining to such wages,

including using the Request for Wage Transfer procedures (TC-IB4)

(or the Interstate Inquiry, IBIQ, via the ICON). However, if the TC-

IB4 is used, such use must not interfere with the processing of a

regular claim and the employment and wages must be returned as

unused.

(2) Excepted Employee has Insufficient Base Period Wages to

Qualify. If the excepted employee has insufficient employment and

wages in the base period to qualify, the State agency will prorate

the individual's annual salary, as reported by the Federal agency

that designated the individual as a Federal excepted employee, in

terms of quarters or weeks of wages in the base period, as

appropriate, and issue a monetary determination, accordingly. In

addition, the excepted worker's most recent earnings and leave

statement will reflect the excepted employee's annual and weekly

salary and may be utilized for the projection utilizing the

affidavit procedure.

d. UCFE-EEP Weeks Claimed. When an employee is designated as an

excepted employee, even for a portion of a week, such individual

shall be determined eligible for UCFE-EEP for the entire week. This

includes excepted employees who may be on leave during an entire

week or portion thereof.

e. Overpayments. Should an appropriation or continuing

resolution occur that retroactively provides for the payment of

salary to excepted employees, State and Federal laws governing

overpayments will need to be applied to weeks paid under the UCFE-

EEP program (20 CFR 609.11).

f. Relationship to Other Programs. Eligibility for UCFE-EEP has

no effect on unemployment compensation payable under any other State

or Federal law. Benefits under this program are payable only to an

excepted employee. If an excepted employee's status changes for any

week during the furlough period, UCFE-EEP benefits are not payable

and the individual must establish eligibility under the regular

requirements for such week.

9. Instructions for Reporting UCFE-EEP Transactions on Form ETA

2112. Advances and expenditures under the Excepted Employee Program

are to be reported on the ETA 2112 in the same manner as

transactions for the regular UCFE program.

Drawdowns: On line 23, include in columns C and E, amounts which

have been received as advances or reimbursements from the Federal

Employees Compensation Account (FECA) for payment of benefits to

Federal civilians under provisions of the UCFE-EEP. Disbursements:

On line 43, include in columns C and F, net benefit payments made to

Federal civilians under the UCFE-EEP with funds received from the

FECA.

10. Fiscal Requirements. All UCFE-EEP paid to an excepted

employee during the furlough period will be billed to the Federal

agency placing the individual in excepted employee status.

Administrative costs for the workload associated with UCFE-EEP

claims will be paid from contingency funds at the Fiscal Year 1996

allocated MPU level.

11. Reporting Instructions. While counts of UCFE-EEP claims will

be incorporated in the existing UCFE reporting, separate counts for

three items of data are required to track the UCFE-EEP claimants.

Separate counts should be reported weekly on: (a) the number of

individuals who file new and additional initial claims for UCFE-EEP

benefits; (b) the number of weeks of UCFE-EEP benefits that were

compensated during the report week; and (c) the amount of UCFE-EEP

benefits paid for those weeks.

Because this should be a temporary situation, this data is to be

reported electronically on the Quick Response Report. The Quick

Response Report is a blank report found in the UI Required Reports

(UIRR) electronic entry system. Once in the UIRR system, ``Access

Reports'' should be chosen, followed by ``Special Programs'' and

then ``arQuick Response Report''. This is a blank report where 12

unlabeled items may be

[[Page 11874]]

reported. Items 1 through 3 are already being used for Self

Employment data reporting in those few States which have that

program. Therefore, items 6, 7 and 8 will be used for UCFE-Expected

Employee claimant data reporting.

Fill in the report date item using the Saturday week ending date

of the week in which the activity occurred. Report in item 6 the

total number of initial claims, both new and additional, filed by

UCFE-EEP claimants during the report week. Report in item 7 the

total number of weeks compensated for UCFE-EEP claimants during the

report week. Report in item 8 the total amount of benefits paid for

the weeks reported in item 7. Please note in comments that the data

is for UCFE-EEP claimants. No edits are available on the Quick

Response Report.

This report will be due the Friday following the week in which

the activity took place. Reporting will continue as long as there is

activity. These reporting requirements have been submitted to the

Office of Management and Budget (OMB) for approval under the

Paperwork Reduction Act of 1995. States are not required to report

until that approval is received. When the approval is received,

States will be notified and provided the OMB approval number and

expiration data.

12. Action Required.

a. Department of Labor. The Department of Labor has instructed

affected Federal agencies, directly and through the Office of

Personnel Management (OPM), to furnish SESAs with the list of each

agency's excepted employees, including the employee's home address,

Social Security Number, annual Federal salary rate, effective date

of designation, and base period qualifying wage and employment

information. Also, Federal agencies are being instructed to furnish

an on-going list of employee changes to and from excepted employee

status if applicable. Once the State agency has been provided with

all of the information pertaining to an excepted employee, the

Federal agency will furnish only the pertinent information for

changes.

In addition, Federal agencies are being advised to establish a

liaison person(s) to work with each SESA in administering the UCFE

program for excepted workers. This may be the same person already

assigned UCFE program liaison responsibilities.

To the extent possible, the Department of Labor National Office

and Regional Offices will work with the affected Federal agencies to

provide information to the SESAs that will expedite and

administratively ease the establishment of UCFE-EEP by the SESAs.

b. State Agencies. SESA Administrators shall:

(1) Provide the above guidance in this UIPL to appropriate

staff.

(2) Ensure that appropriate staff perform all actions necessary

to provide for the proper payment of UCFE-EEP to excepted employees

for a program that could begin as early as January 27, 1996. This

will include--

(A) When contacted by the Federal agency liaison, coordinating

with such individual(s) actions necessary to receive the

information, described in section a. above and any other actions

determined necessary by the State agency, that will enable UCFE-EEP

claims to be processed. The claims filing procedures that excepted

employees are to follow should also be explained to the Federal

agency;

(B) Establishing UCFE-EEP claims for excepted employees in a

prompt manner, minimizing any in-person reporting by such employees.

For example, the State could send appropriate claims forms to

individuals identified by the Federal agency as excepted employees

in order for such individuals to file claims;

(C) Promptly determining monetary eligibility for UCFE-EEP

claims based on base period qualifying employment and earnings or

the annual salary figure supplied by the Federal agency and/or the

earnings and leave statement furnished by the applicant through the

use of the ES-935 affidavit process in the absence of base period

wages reported by the Federal agency;

(D) Making prompt payment of UCFE-EEP benefits to excepted

employees including payment for what would otherwise be a waiting

period;

(E) Developing any other procedures with Federal agencies that

will ease administration of this special program;

(F) Adhering to the fiscal guidelines set forth in this document

and furnishing required reports in a timely manner.

13. Inquiries. Questions should be directed to the appropriate

Regional Office.

Directive: Unemployment Insurance Program Letter No. 7-96, Change 1

To: All State Employment Security Agencies

From: Mary Ann Wyrsch, Director, Unemployment Insurance Service

Subject: Unemployment Compensation for Federal Employees (UCFE)

Excepted Employee Program (UCFE-EEP)

1. Purpose. To inform States of Office of Management and Budget

approval of the reporting on the UCFE-EEP and to correct the

reference to Public Law (P.L.) 104-92 in UIPL 7-96.

2. Reference. UIPL 7-96.

3. OMB Approval. Reporting requirements set forth in the

referenced UIPL are approved by OMB under the Paperwork Reduction

Act of 1995. The OMB number is 1205-0364 with an expiration date of

April 30, 1996. States are not required to respond to this

collection of information unless it displays a currently valid OMB

control number.

4. Burden Estimate. Public reporting burden for this collection

of information is estimated to average 1 hour per response,

including the time for reviewing instructions, searching existing

data sources, gathering and maintaining the data needed, and

completing and reviewing the information. Send comments regarding

this burden estimate or any other aspect of this collection of

information, including suggestions for reducing this burden, to the

U.S. Department of Labor. Office of Unemployment Insurance, 200

Constitution Avenue NW., Room S-4519, Washington, D.C. 20210

(Paperwork Reduction Project 1205-0364).

5. Correction to UIPL 7-96. All referenced to P.L. 102-94 in

UIPL 7-96 should be changed to read P.L. 104-92.

6. Action Required. States are now required to report UCFE-

Excepted Employee data, when appropriate as outlined in the

referenced UIPL.

7. Questions. Inquiries should be directed to the appropriate

Regional Office.

----------------------------------------------------------------------

Rescissions

None.

Expiration date:

[FR Doc. 96-6989 Filed 3-21-96; 8:45 am]

BILLING CODE 4510-30-M