Unemployment Insurance Program Letter No. 37-99, UI PERFORMS Performance Measures and Minimum Performance, Criteria for Tier I Measures

DEPARTMENT OF LABOR

Employment and Training Administration

Unemployment Insurance Program:

Unemployment Insurance Program Letter No. 37-99, UI PERFORMS

Performance Measures and Minimum Performance, Criteria for Tier I

Measures

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice.

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SUMMARY: UI PERFORMS is the Department of Labor's management system for

promoting continuous improvement in Unemployment Insurance (UI)

operational performance. Unemployment Insurance Program Letter (UIPL)

No. 41-95 (August 24, 1995) described in detail the features of the UI

PERFORMS performance management system, including Tier I performance

measures, for which uniform national criteria representing minimum

levels of acceptable performance would be established, and Tier II

measures, for which no uniform national criteria would be established.

The proposed minimum performance criteria for UI PERFORMS Tier I

measures were published in UIPL No. 4-99 (October 20, 1998) and the

Federal Register (FR) at 63 FR 63544 (November 13, 1998). These

issuances also proposed additional Tier II measures beyond those

initially identified in UIPL No. 41-95 and invited the comments of

State Employment Security Agency (SESA) Administrators and the public.

This notice consists of the Department of Labor's responses to the

comments that were submitted, and a UIPL which disseminates the minimum

performance criteria for Tier I measures and their effective dates and

describes the relationship of the Tier I and Tier II measures to the

State Quality Service Plan (SQSP) process.

EFFECTIVE DATES: The effective dates for each of the minimum

performance criteria for UI PERFORMS Tier I measures are provided in

the summary table in section four of the UIPL.

FOR FURTHER INFORMATION CONTACT: Ms. Sandra King, Director, Division of

Performance Review, Unemployment Insurance Service, U.S. Department of

Labor, Employment and Training Administration, 200 Constitution Avenue,

NW, Room S-4231, Washington, DC 20210 (telephone: 202-219-5223,

extension 160); or Andrew Spisak, who can be contacted at the same

address or by telephone at 202-219-5223, extension 157. (These are not

toll free numbers.)

SUPPLEMENTARY INFORMATION:

Background

When the State-Federal Performance Enhancement Work Group (PEWG)

established the outlines of the UI PERFORMS system for promoting

continuous improvement in UI operational performance, it identified ten

key measures for which uniform national criteria would be set. It

called these ``Tier I'' measures. The criteria for these measures were

to be interpreted as minimum levels which States always would be

required to meet.

In November 1997, the Performance Enhancement Group (PEG) met for

the first time in Washington, DC. The PEG is the successor to the PEWG,

and, like the PEWG, is comprised of State and Federal employment

security administrators. The PEG was convened to complete the design

and implementation of the UI PERFORMS system.

The PEG ratified the PEWG's definitions of the performance measures

and established three workgroups--Appeals, Benefits, and Tax--to

develop recommendations for the criteria. Each group included Federal

staff from the National and Regional Offices, and representatives from

at least two States. The PEG developed guidelines for the workgroups to

follow in developing their recommendations. The PEG also deferred

setting a criterion for one Tier I measure, cashiering timeliness,

until a data collection methodology can be developed for that measure

that can be applied uniformly by all States.

The workgroups' reports were presented to the PEG at its meeting in

Washington, DC, on September 28-30, 1998. The PEG reviewed the

workgroups' recommendations, both in terms of the individual Tier I

measures and in light of their cumulative burden, and recommended

appropriate adjustments. UIPL No. 4-99 and the November 13, 1998 FR

Notice identified and discussed the proposed minimum performance

criteria for UI PERFORMS Tier I measures and solicited the comments of

the SESA administrators and the public on the proposed performance

criteria.

Summary of Comments and Department of Labor Responses

A total of 26 States submitted comments in response to UIPL No. 4-

99. Six States submitted comments in response to the November 13, 1998

FR Notice, which provided a 60-day period for public comment on the

proposed criteria. The comments of three of these States were the same

as the comments these States submitted in response to the UIPL. In

addition to the States, two public interest groups submitted comments

in response to the FR Notice.

The following sections identify the minimum criteria for the nine

Tier I measures that were proposed in UIPL No. 4-99 and the November

13, 1998 FR Notice; summarize the comments; and give the Department of

Labor's responses.

I. First Payment Timeliness

Proposed criteria effective fiscal year (FY) 2000: One aggregate

measure combining total and partial/part-total first payments for

intrastate and interstate State UI, Unemployment Compensation for

Federal Employees (UCFE), and Unemployment Compensation for Ex-

Servicemembers (UCX):

1. 87 percent within 14 days of the week-ending date of the first

compensable week for States requiring a waiting week of unemployment

and 21 days of the week-ending date of the first compensable week for

non-waiting week States.

2. 93 percent within 35 days.

Proposed criteria effective FY 2002 or the first SQSP cycle

following the issuance of the regulation governing UI PERFORMS,

whichever is later:

One aggregate measure combining total and partial/part-total first

payments for intrastate and interstate State UI, UCFE, and UCX:

1. 90 percent within 14 days of the week-ending date of the first

compensable week for States requiring a waiting week of unemployment

and 21 days for non-waiting week States.

2. 95 percent within 35 days.

Summary of Comments and the Department's Response: Thirteen States

commented on this measure.

Two States supported the proposed criteria for the aggregate

measure of first payment timeliness. One of these States also endorsed

the proposal to establish separate Tier II measures for UI interstate,

UCFE, and UCX first payments. Two States expressed their expectations

of meeting the proposed criteria without commenting on the merits of

the proposed criteria.

Nine States objected to the proposed criteria for the aggregate

measure, although one of these States supported the current criterion

for compliance in 20 CFR 640.5 of 87 percent of first payments issued

within 14 days from the week-ending date of the first compensable week

in States that require a waiting week and 21 days in States that do not

require a waiting week. These nine States cited several reasons

[[Page 38089]]

for objecting, such as the inclusion in the measure of interstate UI,

UCFE, and UCX claims (for which prompt first payments might be more

difficult), State alternative base period provisions, the fact-finding

efforts required to satisfy the nonmonetary quality review, the

inclusion of payments resulting from appeals reversals, and State law

provisions such as backdating claims for partial unemployment.

The Department believes that the proposed minimum criteria are

administratively feasible, and that differences in State UI laws and

procedures will not affect the ability of States to meet the criteria.

For the period April 1998 through March 1999, 46 States met the current

14/21-day timeliness criterion for compliance in 20 CFR 640.5 for first

payment of benefits for weeks of total unemployment for intrastate

claims under the State UI program, and five of the seven States that

did not meet the criterion were within five percentage points of

meeting it. Fifty-two States met the 35-day timeliness criterion for

compliance in 20 CFR 640.5 for first payment of benefits for weeks of

total unemployment for intrastate claims under the State UI program.

For first payment of benefits for weeks of total unemployment for

interstate claims under the State UI program, 49 States met the 14/21-

day criterion, and 51 States met the 35-day criterion in 20 CFR 640.5.

Performance data do not support the contention that including

payments for interstate UI, UCFE, and UCX claims in the measure will

preclude States from meeting the minimum criteria. From April 1998

through March 1999, only 3 of the 46 States that met the 14/21-day

timeliness criterion for compliance in 20 CFR 640.5 for first payment

of benefits for weeks of total unemployment for intrastate claims under

the State UI program would fail to meet the same criterion applied to

an aggregate timeliness measure that included first payments for weeks

of total and partial/part-total unemployment for interstate and

intrastate claims in the State UI, UCFE, and UCX programs.

For the same period, none of the 52 States that met the 35-day

timeliness criterion for compliance in 20 CFR 640.5 for first payment

of benefits for weeks of total unemployment for intrastate claims under

the State UI program would fail to meet the same criterion applied to

an aggregate timeliness measure.

The Department intends to issue a notice for comment on a proposed

regulation establishing a UI PERFORMS management system. The Department

intends that this regulation will supersede 20 CFR Part 640. Comments

submitted in response to the UI PERFORMS proposed regulation will be

considered along with the comments submitted in response to UIPL No. 4-

99 and the November 13, 1998 FR Notice prior to publishing a UI

PERFORMS Final Rule. Until the UI PERFORMS Final Rule takes effect, the

existing criteria for compliance with the Secretary's Standard for

Unemployment Compensation benefit payment promptness (20 CFR 640.5)

continues to be the minimum performance criteria for the first payment

timeliness Tier I measure.

For first payments of weeks of total unemployment for intrastate

State UI claims, consistent with 20 CFR 640.5, the minimum Tier I

performance criteria are:

1. 87 percent within 14 days of the week-ending date of the first

compensable week for States requiring a waiting week of unemployment

and 21 days of the week-ending date of the first compensable week for

non-waiting week States.

2. 93 percent within 35 days.

For first payments of weeks of total unemployment for interstate

State UI claims, consistent with 20 CFR 640.5, the minimum Tier I

performance criteria are:

1. 70 percent within 14 days of the week-ending date of the first

compensable week for States requiring a waiting week of unemployment

and 21 days of the week-ending date of the first compensable week for

non-waiting week States.

2. 78 percent within 35 days.

II. Nonmonetary Determinations Timeliness

Proposed criteria effective FY 2002: Single aggregate measure

including determinations for intrastate and interstate claims for State

UI, UCFE, and UCX:

1. 80 percent of separation determinations issued within 21 days

from date of detection by the SESA of any nonmonetary issue which had

the potential to affect the claimant's past, present, or future benefit

rights to date of the determination.

2. 80 percent of nonseparation determinations issued within 14 days

from date of detection by the SESA of any nonmonetary issue which had

the potential to affect the claimant's past, present, or future benefit

rights to date of the determination.

Summary of Comments and the Department's Response: Fourteen States

and one public interest group commented on this measure.

Six States objected to the disparate treatment of separation and

nonseparation determinations, because separation and nonseparation

issues are detected often at the same time.

With respect to the point of time at which separation and

nonseparation issues are detected, although both separation and

nonseparation issues that must be adjudicated can arise when a new

initial claim for UI benefits is filed, most nonseparation issues arise

from continued claims. The Department believes that the proposed

timeliness intervals for separation and nonseparation determinations

ensure that UI claimants receive payments expeditiously while taking

into account differences in the extent of fact-finding that is required

to adjudicate separation and nonseparation issues. Recognizing that

nonmonetary determinations vary in their degree of complexity,

separation issues, in general, require that the agency contact and

gather information from the claimant, one or more employers, and, in

some instances, third parties in order to decide eligibility.

Nonseparation issues can, more frequently than separation issues, be

adjudicated on the basis of information obtained from the claimant or

agency records. Therefore, a shorter time interval is justified for

nonseparation issues.

Five States believed there was an inconsistency between the

proposed criteria for the timeliness of nonmonetary determinations and

the proposed criteria for first payment promptness. Three States cited

examples in which nonmonetary determinations are required prior to the

date by which the first payment must be issued. For example, one State

cited a separation issue detected on a new initial claim on the 2nd of

the month. In order to meet the proposed timeliness criteria, an

eligibility decision would have to be issued by the 23rd, and, assuming

the claimant was determined to be eligible for benefits, the first

payment would be due within 14 days of the first compensable week. If

the first compensable week ended on the 14th, the first payment must be

issued no later than the 28th.

The Department does not agree that there is a conflict between the

proposed timeliness criteria for first payment of benefits and

nonmonetary determinations. The Department believes that it is, in

fact, logical to require the nonmonetary issues to be adjudicated and

claimant eligibility determined prior to the date by which a first

payment must be issued.

[[Page 38090]]

Six States cited adjudication procedures, including due process

requirements for notification and response and the practice of issuing

nonmonetary determinations only after a week of unemployment has been

claimed, as factors making it difficult to meet the proposed criteria.

The Department believes that many of the concerns cited by the

States arise from a small number of more complex claims that are not

typical of the majority of nonmonetary adjudications, so that for the

totality of nonmonetary adjudications, the proposed criteria are

administratively feasible.

With respect to States that do not issue nonmonetary determinations

until a claim is filed, ET Handbook No. 301, page V-9, states that the

issue detection date is, ``[T]he date the SESA first detected the issue

to which the nonmonetary determination applies. The exception to this

rule is a case where the claimant fails to file a timely certification

and the State has a policy of waiting for a week to be claimed prior to

making a determination. In such cases, the detection date for the

original unresolved issue(s) is the date the claimant subsequently

files an additional or reopened claim.''

Two States commented that the majority of States currently perform

below the proposed criteria, and that it is unrealistic to expect

dramatically improved performance by FY 2002. Conversely, the public

interest group questioned the justification for delaying the effective

date until FY 2002 when so many States are failing to achieve the

criteria and questioned whether the Department currently has the

authority to sanction these States.

The PEG discussed the issue of an appropriate effective date and

agreed that, given the number of States currently performing below the

minimum levels (34 States for the period April 1998 through March 1999)

and the degree of improvement that is needed for several of the States

to meet the criteria (only 5 of the 34 States not meeting the criteria

were within 5 percentage points), an effective date prior to FY 2002

would not be realistic. A two-year delay in implementing these criteria

will provide additional time for States to work with the Federal

partner to identify those areas of UI operations that need to be

addressed and to undertake actions required to improve performance and

meet the criteria.

With respect to the ability to sanction States, the Department

notes that currently there are no criteria specified in regulation for

this measure. States which do not meet the minimum performance criteria

for this measure will be required to submit plans identifying the steps

the State will take to achieve those criteria, and must demonstrate

progress toward meeting them. However, the Department will not initiate

formal action if State performance fails to meet a new criterion prior

to its effective date, provided the Department has received and

approved a satisfactory corrective action plan, and there is evidence

of continuing progress in its achievement.

The public interest group commented also that timeliness should be

measured from the date the claim is filed rather than from the date of

detection. Measuring timeliness from the date of detection might

discourage adjudicators from finding out what the actual issues are or

pursuing leads of issues that are disclosed through fact-finding from

sources other than the employer. The group also believes that it would

also be easier to monitor timeliness measured from the claim date.

The Department notes that State nonmonetary adjudications are

reviewed each quarter to evaluate the quality of the SESA's fact-

finding efforts with respect to claimants, employers, and other

interested parties. The Department has no evidence that measuring

timeliness from the date of detection has an adverse effect on fact-

finding. The Department also notes that, as defined in ET Handbook No.

401 (page V-3-6), ``The issue detection date is the date the new,

additional, or reopened claim is filed. If no issue exists at the time

a claim is filed but information is later received that presents an

issue, then the issue detection date is the date this information is

received by the agency.''

One State ``strongly opposed'' the requirement to produce

improvement plans prior to the effective date of the criteria.

(Note: this State also applied this comment to the proposed

criterion for nonmonetary quality.)

In order to achieve the goal of continuous program improvement, the

Department believes that it is essential for the Department and the

States to work cooperatively in identifying those practices and

procedures that are necessary to raise the State's level of

performance, especially for those States not meeting performance

floors.

One State did not comment specifically on the proposed criteria but

noted that it had previously expressed its concerns about the UI

PERFORMS process.

III. Nonmonetary Determinations Quality

Proposed criterion effective FY 2002: 75 percent of all

determinations with scores greater than 80 points, based on evaluation

results of quarterly samples of nonmonetary determinations selected

from the universe of nonmonetary determinations for intrastate and

interstate claims for State UI, UCFE, and UCX, reported on the ETA 9052

report. Nonmonetary determination samples will be evaluated as

instructed in ET Handbook No. 301 (rev. January 1998).

Summary of Comments and the Department's Response: Thirteen States

and one public interest group commented on this measure.

Five States supported the proposed criterion in general. However,

one of these States commented that the quality evaluation should be

limited to discharge, voluntary quit, able and available, and job

refusal issues. This State felt that inclusion of such issues as full-

time employment and holiday pay will inflate the scores of some States.

Another of these States urged the Department to increase its support

and scheduling of benefits quality training.

The Department believes that it is important to include all

nonmonetary issues in order to conduct a comprehensive evaluation of

quality. Because the State quality samples are representative of the

population of nonmonetary determinations, the State's aggregate score

will reflect the relative importance of the four issue areas cited by

the State. Further, the Department is committed to continue to schedule

benefits quality training at various times and locations.

Three States questioned the scoring system used to evaluate the

quality of nonmonetary determinations. One State felt that the quality

evaluation is a de facto pass/fail system, because a deduction of

points other than for an inadequate written determination will result

in a score of less than 80 points, which is a failing score.

The Department believes that the nonmonetary quality measurement

instrument produces a comprehensive and fair evaluation of the critical

indicators of the quality of State nonmonetary procedures: adequacy of

claimant, employer, and third party fact-finding; opportunity for

rebuttal to the interested parties; correct application of State law

and policy; and the adequacy of the written determination. Evaluators

assign scores which reflect the State agency's performance in these

critical areas. Scoring is conducted as a tripartite review in which at

least one, and preferably two, of the reviewers are

[[Page 38091]]

nonmonetary experts from outside the State which is being evaluated.

Five tripartite review options are available, depending on the

composition of the review team (i.e., the mix of staff from the State

being evaluated, staff from other States, and Federal staff) and the

method used to resolve scoring disagreements. The tripartite review

procedure is described in detail in ET Handbook No. 301, chapter IV and

Appendix B.

Three States urged the Department to identify the reasons so many

States fail to meet the criterion, including a reexamination of the

evaluation measurement tool. One of these States urged that the States

that are meeting the criterion share information with the other States

on the reasons for their success, and another State urged the

Department to collect information on State best practices, share these

with all States, and use this information to provide technical and

financial assistance to the States. Two States urged the Department to

defer implementation of a minimum performance criterion until the

Department and the States identify the reasons why so many States are

failing to meet the proposed criterion.

As stated in UIPL No. 4-99 and the November 13, 1998 FR Notice, the

Department will study the reasons why States fail to meet the minimum

level of performance and will share this information with the States.

The Department will also encourage States that are performing above the

minimum level to share best practices with other States.

The PEG discussed the issue of an appropriate effective date and

agreed that a two-year delay in implementing this criterion will

provide States with sufficient time to undertake actions required to

improve performance and meet the criterion. The Department believes

that an effective date of FY 2002 is realistic, given the number of

States currently performing below the minimum levels (26 States in

calendar year 1998) and the degree of improvement that is needed for

several of the States to meet the criterion (only 7 of the 26 States

not meeting the criterion were within 5 percentage points).

One State commented that it would have to improve its performance

for this measure without commenting on the merits of the proposed

criterion. Another State did not comment specifically on the proposed

criterion but noted that it had previously expressed its concerns about

the UI PERFORMS process.

IV. Lower Authority Appeals Timeliness

Proposed criteria effective FY 2000:

1. 60 percent of decisions within 30 days. (Existing Secretary's

Standard at 20 CFR 650.4(b))

2. 80 percent of decisions within 45 days. (Existing Secretary's

Standard at 20 CFR 650.4(b))

Proposed criteria effective FY 2002 or the first SQSP cycle

following the issuance of the regulation governing UI PERFORMS,

whichever is later:

1. 60 percent of decisions within 30 days.

2. 85 percent of decisions within 45 days.

3. 95 percent of decisions within 75 days.

Summary of Comments and the Department's Response: Ten States

commented on this measure.

Although two of the States that submitted comments supported the

proposed criteria, eight States expressed concerns that centered on

three issues: (1) The concern that improvements in timeliness will

compromise quality and/or due process; (2) the ability to meet the

proposed criteria during periods of high workloads; and (3) the

justification for raising the 45-day performance criterion and adding a

third criterion.

State performance data on lower authority appeals timeliness (ETA

9054 report) and quality (ETA 9057) do not support the contention that

there is a trade-off between quality and promptness. For calendar year

1998, 48 States met the 30-day criterion for compliance in 20 CFR

650.4(b) for lower authority appeals promptness, and 50 States met the

45-day criterion for compliance in 20 CFR 650.4(b) for lower authority

appeals promptness. Only four of the States meeting the 45-day

timeliness criterion failed to meet the proposed lower authority

appeals quality criterion of 80 percent of all benefit appeals with

combined scores equal to at least 85 percent of the potential points

that could be awarded for the evaluation. Only one of the States

meeting the 45-day timeliness criterion failed to meet the current

lower authority appeals quality desired level of achievement of 80

percent of all benefit appeals with combined scores equal to at least

80 percent of the potential points that could be awarded for the

evaluation.

These quarterly evaluations of lower authority appeals quality

include several elements addressing due process. Based on the results

of these evaluations, the Department believes that the timeliness

criteria will not compromise the due process rights of the interested

parties.

With respect to the ability of States to meet the proposed criteria

during periods of high workloads, the PEWG established, as one of the

performance criteria guidelines, the principle that States would be

expected to meet or exceed the criteria, unless attaining the

established levels was not ``administratively feasible'' for the period

measured. State workload is one of several factors that the State and

the Department will consider when assessing administrative feasibility.

The proposal to raise the performance criterion for the 45-day

timeliness measure and add a third criterion reflects the Department's

goal of ensuring that a greater percentage of the cases are disposed of

as efficiently as possible; that cases are not allowed to accumulate

for long periods of time; and that parties to an appeal receive a

hearing and decision in a reasonable amount of time. The third

criterion for the issuance of 95 percent of lower authority appeals

decisions within a specified period will encourage States to reduce the

number of cases that have not been decided within 45 days.

Six States cited concerns about the effect on quality of the

proposed new criterion for issuing 95 percent of lower authority

appeals decisions within 75 days. Two States proposed modifying the

criterion to require that States issue 90 percent of lower authority

appeals decisions within 75 days.

The Department believes that in order to adequately address the

case-aging concerns that motivated the PEG to propose a third

criterion, the criterion must require that 95 percent of the lower

authority appeals decisions be issued within a designated time period.

This will ensure the disposition of all but the most complex cases

within a reasonable time period. However, in order to provide States

with more flexibility to adapt their lower authority appeals practices

and procedures to the new criterion, the Department proposed, and the

PEG agreed, to modify the criterion to require that States issue 95

percent of lower authority appeals decisions within 90 days, rather

than 75 days.

One State suggested that the time lapse measure be replaced with an

``average pendency level'' measure, defined as the total number of days

all appeals have been pending divided by the number of appeals.

The PEG decided that consideration of this measure should be

deferred pending further study of State performance based on this

measure and changes in State data collection procedures that would be

required for its implementation.

[[Page 38092]]

The Department intends to issue a notice for comment on a proposed

regulation establishing a UI PERFORMS management system. The Department

intends that this regulation will supersede 20 CFR Part 650. Comments

submitted in response to the UI PERFORMS proposed regulation will be

considered along with the comments submitted in response to UIPL No. 4-

99 and the November 13, 1998 FR Notice prior to publishing a UI

PERFORMS Final Rule. Until the UI PERFORMS Final Rule takes effect, the

existing criteria for compliance with the Secretary's Standard for

Unemployment Compensation appeals promptness (20 CFR 650.4(b))

continues to be the minimum performance criteria for the lower

authority appeals timeliness Tier I measure:

1. 60 percent of decisions within 30 days.

2. 80 percent of decisions within 45 days.

V. Higher Authority Appeals Timeliness

Proposed criteria effective FY 2000:

1. 50 percent of decisions within 45 days.

2. 80 percent of decisions within 75 days.

3. 95 percent of decisions within 120 days.

Summary of Comments and the Department's Response:

Nine States and one public interest group commented on this

measure. A second public interest group endorsed the comments of the

first.

One State described the proposed criteria as ``fair and

reasonable'', and another State did not comment on the merits of the

proposed criteria but stated that it would have no problem in meeting

them.

Seven States expressed concerns that centered on one or more of

three issues: (1) The ability to meet the proposed criteria during

periods of high workloads; (2) the justification for adding a third

criterion; and (3) the concern that improvements in timeliness will

compromise quality and/or due process.

With respect to the ability of States to meet the proposed criteria

during periods of high workloads, the PEWG established, as one of the

performance criteria guidelines, the principle that States would be

expected to meet or exceed the criteria, unless attaining the

established levels was not ``administratively feasible'' for the period

measured. State workload is one of several factors that the State and

the Department will consider when assessing administrative feasibility.

The proposal to add a third criterion reflects the Department's

goal of ensuring that a greater percentage of the cases are disposed of

as efficiently as possible; that cases are not allowed to accumulate

for long periods of time; and that parties to an appeal receive a

hearing and decision in a reasonable amount of time. The third

criterion for the issuance of 95 percent of higher authority appeals

decisions within a specified period will encourage States to reduce the

aging of cases that have not been decided within 75 days.

Four States disagreed with the proposed time interval for the 95

percent completion criterion and suggested alternative completion

percentages and/or time intervals.

The Department believes that in order to adequately address the

case-aging concerns that motivated the PEG to propose a third

criterion, the criterion must require that 95 percent of the higher

authority appeals be issued within a designated time period. This will

ensure the disposition of all but the most complex cases within a

reasonable time period. However, in order to provide States with more

flexibility to adapt their higher authority appeals practices and

procedures to the new criterion, the Department proposed, and the PEG

agreed, to modify the criterion to require that States issue 95 percent

of higher authority appeals decisions within 150 days, rather than 120

days.

Three States commented that due to the precedential and policy

setting implication of their decisions, higher authority appeals often

require additional time for fact finding, hearings, research, and

drafting opinions. One of these States commented that appellants prefer

the thoroughness and quality of the review process and the due process

guarantees of their State law, to a speedy decision that does not

include a careful review of the facts.

Based on State performance data, the Department believes that the

proposed minimum performance criteria for higher authority appeals

timeliness are reasonable and achievable, given the need to meet the

due process requirements of State law and policy. For the period April

1998 through March 1999, 44 of the 50 States that provide for a higher

authority appeals process met the 45-day and 75-day timeliness

criteria, and 43 States met the proposed 150-day timeliness criterion.

The public interest group urged the establishment of a quality

criterion for higher authority appeals, in addition to the timeliness

measure. A second public interest group endorsed this recommendation.

The Department notes that developing a cost-effective method to

measure higher authority appeals quality that all States can apply

uniformly might be difficult. Nevertheless, because higher authority

appeals quality is important, the PEWG established such a measure under

Tier II, and the Department is committed to its development. As a Tier

II measure, higher authority appeals quality will not have a minimum

performance criterion. However, all UI PERFORMS measures, including

their categorization as Tier I or Tier II measures, will be

periodically reviewed.

VI. Lower Authority Appeals Quality

Proposed criterion effective FY 2000: 80 percent of all benefit

appeals with combined scores equal to at least 85 percent of potential

points, based on the results of quarterly samples of lower authority

benefit appeals hearings selected and evaluated as instructed in ET

Handbook No. 382 (2nd ed.).

Summary of Comments and the Department's Response: Six States

commented on this measure.

Comments were generally positive, although one State commented that

setting the minimum passing score at 85 percent of the potential points

is a significant change from the current desired level of achievement,

for which the minimum passing score is 80 percent of the potential

points, and increases the likelihood that a case will fail the

evaluation. This State urged postponement of the higher criterion until

FY 2002 to allow States to correct any problems developing from the

criterion.

Data for calendar year 1998 show that 46 States met the proposed

criterion and 2 other States were within 5 percentage points of meeting

the criterion. Therefore, based on State performance, the Department

believes the criterion is reasonable and should not be postponed.

One State recommended that any hearing that fails any of the eight

critical elements should fail the quality review.

The Department believes that it would be premature to propose a

criterion for minimum performance with respect to the critical

elements. After additional data are collected, State performance on

these critical elements can be evaluated, and the role of these

elements in setting minimum performance criteria can be considered when

the Tier I measures are next reviewed.

VII. Timeliness of New Employer Status Determinations

Proposed criteria effective FY 2002:

[[Page 38093]]

1. 60 percent of determinations made within 90 days of the quarter

ending date (QED).

2. 80 percent of determinations made within 180 days of the QED.

Summary of Comments and the Department's Response: Nine States

commented on this measure.

Comments were generally positive, although one State proposed that

for those employer determinations for which the tax office has not been

notified timely that liability has occurred, the notification date

(comparable to the date of detection for nonmonetary determinations)

should be used to calculate timeliness instead of the QED.

The Department does not agree with this proposal, because relying

on the employer notification date will remove any incentive for States

to actively identify new employers. Further, the current reporting

system does not use the notification date and, therefore, does not

support this proposal.

VIII. New Employer Status Determinations Accuracy

Proposed criterion effective FY 2002: No more than 6 cases from an

acceptance sample of 60 cases can fail the evaluation. This criterion

implies that at least 95 percent of the samples will pass (that is, 6

or fewer cases will fail the evaluation) if State accuracy rate is

greater than or equal to 94.5 percent, and that at least 90 percent of

the samples will fail (that is, more than 6 cases will fail the

evaluation) if State accuracy rate is less than or equal to 82.4

percent.

Summary of Comments and the Department's Response: Nine States

commented on this measure.

Comments were generally positive, although 2 States questioned

whether the proposed criterion of 6 failures in a sample of 60 cases

should apply also to other Tax Performance System (TPS) measures.

Currently, no more than 2 cases in an acceptance sample of 60 cases

may fail an evaluation for a TPS measure. This standard implies a level

of performance higher than the level that is appropriate for Tier I

measures, which are minimum performance levels. New Employer Status

Determinations Accuracy is the only TPS acceptance sample measure that

is in Tier I and, therefore, should be subject to a different criterion

from other TPS measures.

One State sought clarification of whether this measure includes the

accuracy of both the determination and the posting of the determination

(that is, the accurate recording of the accounts maintenance function

information in the agency's records).

This measure will apply to the accuracy of the determination only.

This includes the accuracy of the liability decision, whether the State

followed correct procedures and obtained proper documentation, and

whether it assigned the correct tax rate. Accuracy of the posting will

be evaluated as a Tier II measure.

IX. Timeliness of Transfer From Clearing Account to Trust Fund

Proposed criterion effective for the FY 2000 and FY 2001 SQSP: A

maximum of two days to transfer funds from the State clearing account

to the State account in the Unemployment Trust Fund.

Effective with the FY 2002 SQSP: Maintenance of an annual ratio of

the monthly average daily available balance (line 10, ETA 8414 report)

to the average daily transfer to the trust fund (line 3, ETA 8405

report, divided by the number of days in the month) less than or equal

to 1.75.

Effective with the FY 2005 SQSP: Maintenance of an annual ratio

less than or equal to 1.0.

Summary of Comments and the Department's Response: Fourteen States

commented on this measure.

Comments were mixed, with six States offering outright or qualified

support for the proposed criteria. However, four States strongly

objected to both the current timeliness and proposed ratio criteria on

the grounds that States which finance banking services through clearing

account balances would not be able to meet either the time lapse or

ratio criteria. Two States noted that States would be forced to

eliminate a source for paying for banking services in order to meet the

criterion. Another State suggested that this measure be moved to Tier

II, because State performance cannot be measured in a uniform manner,

or that separate measures be developed for States funding lockbox

operations through clearing account balances. One State urged the

Department to provide States with incentives to make the transition to

electronic filing and payment. One State ``strongly'' urged the

Department to consider the funding of banking services in developing

cash management performance measures.

The Department acknowledges the States' desire to maintain

compensating balances in the clearing account to support State banking

services and lockbox operations. However, the PEWG considered it

important to establish a Tier I measure that reflects the immediate

deposit and withdrawal requirements. The PEG ratified this decision.

Compensating balances in the clearing account are in direct conflict

with Federal law governing the ``immediate deposit'' (section

3304(a)(3) of the Federal Unemployment Tax Act (FUTA) and section

303(a)(4) of the Social Security Act (SSA)) and ``withdrawal'' (section

3304(a)(4) of FUTA and section 303(a)(5) of the SSA) requirements.

Under the ``immediate deposit'' standard, in order for employers in a

State to receive credit against the Federal unemployment tax, and for

States to receive their administrative grants, all UI taxes must be

transferred to and deposited in the Unemployment Trust Fund immediately

after going through the State's clearing account. Under the

``withdrawal'' standard, money must be withdrawn from the State's

unemployment fund solely for payment of unemployment compensation. The

use of such funds for ``expenses of administration'' is explicitly

prohibited. Therefore, the constructive use of compensating balances by

States is inconsistent with Federal law.

The President's FY 2000 budget proposal committed the Department to

discuss UI and employment service reform with stakeholders and Congress

for purposes of developing a comprehensive bipartisan legislative

reform proposal. As a result of discussions which have occurred so far,

two proposals are under consideration which, if enacted, would affect

this criterion. The first would allow States to use earnings on moneys

in the clearing account to pay routine banking costs. The second would

allow also for the payment of additional costs such as those incurred

in operating a lockbox. Should either of these changes become law, the

criterion for this measure will be revised accordingly.

Two States sought a more complete discussion of the data reporting

issues that need to be resolved as a prerequisite to the implementation

of the ratio measure.

The Department believes that the proposal provides adequate time to

resolve data reporting inconsistencies before the proposed ratio

measure is introduced. The Department is committed to resolving these

issues with the full participation of the States.

Two States expressed concern that use of the average daily

available balance in the ratio measure would produce a skewed or

misleading result due to the commingling of funds in the State clearing

account that are not transferred to the trust fund.

The Department notes that States must identify and report

separately

[[Page 38094]]

funds other than employer contributions that are deposited in the

clearing account, which eliminates the potential for skewed or

misleading results.

Three States believed the proposed ratio criterion will be more

difficult to meet than the time lapse measure.

Performance data do not support the contention that States which

are able to meet the 2-day time lapse criterion would have difficulty

meeting the proposed ratio of 1.75 or less. For the reporting period

April 1998 through March 1999, only 2 of the 31 States that met the 2-

day time lapse criterion had ratios greater than 1.75. On the other

hand, 7 States that failed to meet the 2-day time lapse criterion had

ratios less than 1.75.

General Comments

Nine States and two public interest groups offered comments that

were not specific to any measure.

Two States requested clarification of the term

``administratively feasible''.

The Department measures administrative feasibility by observing and

evaluating State performance. If States are performing at or above a

minimum performance level of quality, promptness, etc., this

constitutes evidence that a criterion is administratively feasible.

However, a variety of evidence may be used to measure administrative

feasibility. Because circumstances in States vary, the Department

reserves the right to evaluate administrative feasibility on a case-by-

case basis.

One State requested that the reference to ``persistent

performance below the established criterion'' be described or defined.

The period must be long enough to establish that the poor

performance is not transitory, and also to allow the State a reasonable

time to improve performance. In general, the Department believes that

two years of continuous performance below the criterion demonstrates

sustained poor performance. However, since circumstances in States

vary, the Department reserves the right to handle performance problems

on a case-by-case basis.

Two States pointed out the difficulty of applying

universal criteria to diverse State operations. One of these States

expressed concern that States might be forced into standardizing their

operations to meet national criteria, thereby compromising their rights

in the State/Federal partnership.

The Department believes that uniform performance criteria must be

applied as a matter of fairness and equity for States, employers, and

UI claimants across all jurisdictions. The application of different

criteria in an attempt to take into account differences in State laws

and administrative practices inevitably invites subjective judgements,

which would be inconsistent with a national program improvement system

such as UI PERFORMS. Among the principles for Tier I performance

measures established by the PEWG and ratified by the PEG is the

requirement that Tier I measures would have the same meaning in all

States so that interstate comparisons are valid. In contrast, the PEWG

and PEG recognized that some performance measures inherently reflect

interstate variability and, accordingly, designated these as Tier II

measures.

The Department believes that the Tier I measures represent core or

critical areas of UI customer service and that the criteria are minimum

levels, at or above which all States should be able to perform,

regardless of differences in State operations.

One State recommended that a customer satisfaction survey

be added as a performance measure.

The Department will require States to include information on their

plans for evaluating customer satisfaction and utilizing customer input

to promote continuous improvement in the SQSP narrative. However, the

Department does not agree that the results of State customer

satisfaction surveys can be used as a Tier I measure. The Department

believes that the results of State customer satisfaction surveys will

reflect differences in survey design and administration. Therefore,

these results cannot be used to establish uniform national criteria for

Tier I measures.

We note that the Department's Unemployment Insurance Service (UIS)

conducted a national survey of customer satisfaction and transmitted

the final report to Regional Administrators via UIS Information

Bulletin 6-99 (February 19, 1999). States may obtain copies by

contacting their respective Regional Office.

One State questioned whether resources in small States are

adequate to achieve the performance criteria, given the commitment of

resources required to achieve Y2K compliance of automated systems, and

the need to commit resources to continuous program improvement, which

have placed a strain on UI program operations, particularly in smaller

States.

Although the Department is aware of the many demands on program

resources, the Department believes that all States have the resources

necessary to meet these minimum levels of UI program performance. State

data do not indicate that there is any correlation between State UI

workload and State performance for the Tier I measures. An examination

of the most recent annual performance data shows that the smaller

States were no more likely to fail to meet the proposed criteria than

were the larger States.

One State questioned why no large States were represented

on the PEG.

The Department asked the Interstate Conference of Employment

Security Agencies (ICESA) to solicit State participation on both the

PEWG and PEG and selected members from the State volunteers identified

by ICESA.

The public interest groups strongly urged the Department

to implement all of the performance measures and minimum criteria in

regulation, rather than through a UIPL and FR Notice, to provide added

weight in achieving compliance.

The Department intends to establish a regulation governing the

structure of the UI PERFORMS system. A principal goal of UI PERFORMS is

the continuous improvement of the UI system. The Department believes

that achieving this goal requires flexibility, especially in the early

stages, and that the specification of performance measures and criteria

through UIPLs and FR Notices, instead of through regulation, provides

this flexibility and simplifies the process of changing the measures or

criteria as needed. However, the Department will make no changes in the

performance measures without providing advance notice and an

opportunity for comment.

The Department is committed to reviewing performance measures and

criteria periodically, as agreed to by the PEWG and affirmed by the

PEG. Final determination of the criteria for the two current

Secretary's Standards--first payment timeliness and lower authority

appeals timeliness--will occur in conjunction with proposed UI PERFORMS

rulemaking. The first periodic review of the full set of Tier I

measures will occur not more than five years from the date of issuance,

with the exception of the criteria for nonmonetary determinations

timeliness, nonmonetary determinations quality, and new employer status

determinations accuracy, which will be reviewed after two years.

With respect to all of the timeliness measures, one of the

public interest groups noted that the criteria do not impose any

requirements with respect to those matters, above the maximum

percentage listed, which do not meet the longest time interval. The

group noted that both the Department and others need information on

what has happened to those cases, because they, too, are

[[Page 38095]]

governed by the ``payment of unemployment compensation when due''

requirement of section 303(a)(1) of the Social Security Act. The group

commented that State reports must continue to include information on

the precise time lapses for these cases, and that the Department should

review this data, make a factual inquiry into why those decisions have

been delayed, and assess whether the State has met the administrative

feasibility standard of the ``when due'' clause of section 303(a)(1),

SSA, as interpreted in California Dept. of Human Resources Development

v. Java, 402 U.S. 121, 91 S.Ct. 1347 (1971).

The Department will continue to require that States report UI

program data for all time intervals defined in ET Handbook No. 401,

including intervals greater than the maximum intervals specified for

the Tier I timeliness measures. The Department will use this

information as part of the SQSP process to achieve the UI PERFORM's

goal of continuous program improvement.

Attached is UIPL No. 37-99, titled ``UI PERFORMS Tier I and Tier II

Performance Measures, and Minimum Performance Criteria for Tier I

Measures''.

Signed at Washington, DC, on June 28, 1999.

Grace A. Kilbane,

Director, Unemployment Insurance Service.

Date: July 1, 1999.

Directive: Unemployment Insurance Program Letter No. 37-99.

To: All State Employment Security Agencies.

From: Grace A. Kilbane, Director, Unemployment Insurance

Service.

Subject: UI PERFORMS Tier I and Tier II Performance Measures,

and Minimum Performance Criteria for Tier I Measures.

1. Purpose. To disseminate the performance measures that will be

used to assess program operations and plans for program improvement,

establish the minimum performance criteria for Tier I measures and

their effective dates, and discuss the relationship of the Tier I

and Tier II measures to the State Quality Service Plan (SQSP)

process.

2. References. Unemployment Insurance Program Letter (UIPL) No.

41-95 (August 24, 1995), UIPL No. 19-98 (March 30, 1998), UIPL No.

34-98 (July 23, 1998), UIPL No. 4-99 (October 20, 1998), and Federal

Register Notice (FRN) 63 FR 63544 (November 13, 1998).

3. Background. The State-Federal Performance Enhancement Work

Group (PEWG) established the outlines of the UI PERFORMS system for

promoting continuous improvement in UI operational performance and

identified performance measures for the performance management

system. Ten of these measures were designated ``Tier I'' measures,

for which uniform national criteria representing minimum levels of

acceptable performance would be established.

UIPL No. 41-95 provided a detailed description of the UI

PERFORMS system and solicited comments on the proposed system from

State Employment Security Agency (SESA) administrators.

UIPL No. 41-95 included:

A discussion of the principles of the State and Federal

partnership, including the roles and responsibilities of each party.

The identification of key performance measures, which

were designated as either Tier I or Tier II measures.

Ten Tier I measures were identified. These measures

represent core or critical areas of UI customer service for which

uniform national criteria would be established. States would address

their performance for the Tier I measures annually through the SQSP.

The Tier II measures were established for other

important UI activities. States would report performance data on a

regular basis to the Department of Labor; however, no performance

criteria were established for Tier II measures. States would set

performance targets for the Tier II measures in consultation with

the Federal partner and plan for performance improvement through the

SQSP process. The Tier II measures are listed in the Attachment.

A general description of the continuous improvement,

``Plan-Do-Check-Act'' cycle, and a detailed discussion of the SQSP

and the planning process, including the plan narrative, quantitative

displays of performance data, and criteria to identify performance

needing improvement.

A discussion of Federal oversight, including technical

assistance, financial assistance, rewarding State accomplishments,

and actions to improve performance. This last activity includes the

development of corrective action plans by States that fail to meet

the minimum performance criteria, and conformity/compliance actions

to address exceptional instances of continued failure to meet

minimum levels of performance.

The PEWG's successor, the Performance Enhancement Group (PEG),

ratified the performance criteria principles established by the

PEWG. These principles were included in UIPL No. 4-99. PEG materials

related to the establishment of performance criteria for the Tier I

measures were provided in UIPL No. 19-98, and UIPL No. 34-98

described the process for establishing the performance criteria.

The PEG also deferred setting a criterion for one of the ten

Tier I measures, cashiering timeliness, until a data collection

methodology can be developed for that measure that can be applied

uniformly by all States.

The PEG established three workgroups--Appeals, Benefits, and

Tax--to develop recommendations for the criteria for the nine other

Tier I measures. Each workgroup included Federal staff from the

National and Regional Offices and representatives from at least two

States. The PEG developed guidelines for the workgroups to follow in

developing their recommendations.

The workgroups' reports were presented to the PEG at its meeting

in Washington, DC, on September 28-30, 1998. The PEG reviewed the

workgroups' recommendations, both in terms of the individual Tier I

measures and in light of their cumulative burden, and recommended

appropriate adjustments.

UIPL No. 4-99 disseminated the proposed criteria and solicited

the comments of the SESA Administrators. The November 13, 1998 FRN

disseminated the proposed criteria and provided a 60-day period for

public comment on the proposed criteria.

A total of 26 States submitted comments in response to UIPL No.

4-99. Six States submitted comments in response to the November 13,

1998 FRN. However, the comments of three of these States were the

same as the comments these States submitted in response to the UIPL.

In addition to the States, two public interest groups submitted

comments in response to the FRN.

4. Definitions, Criteria, and Effective Dates. Tier I criteria

will be used to assess State performance beginning with the SQSP

cycle shown in the following Tier I performance measure table.

States which do not meet minimum performance criteria which become

effective in fiscal year (FY) 2002 (or later) will be required to

submit plans identifying the steps the State will take to achieve

those criteria, and must demonstrate progress toward meeting them.

However, the Department of Labor will not initiate formal action if

State performance fails to meet a new criterion prior to its

effective date, provided the Department of Labor has received and

approved a satisfactory corrective action plan and evidence of

continuing progress in its achievement.

State performance assessment is discussed in detail in the State

Quality Service Plan Handbook (ET Handbook No. 336, 16th Edition).

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

Effective date/criterion Fiscal year--

Tier I measure --------------------------------------

2000 SQSP 2002 SQSP 2005 SQSP

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

First Payment Timeliness: Number of days elapsed from week-ending date of the first compensable week in benefit

year to date payment is made in person, mailed, or offset or intercept is applied on the claim. Source: ETA 9050

report.

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

Percent of 1st Payments within 14/21 days: Intrastate UI, full weeks..... 87 ........... ...........

[[Page 38096]]

Percent of 1st Payments within 35 days: Intrastate UI, full weeks........ 93 ........... ...........

Percent of 1st Payments within 14/21 days: Interstate UI, full weeks..... 70 ........... ...........

Percent of 1st Payments within 35 days: Interstate UI, full weeks........ 78 ........... ...........

Percent of 1st Payments within 14/21 days: Intrastate + Interstate UI, ........... *90 *90

UCFE, UCX programs, full + partial/part-total weeks.....................

Percent of 1st Payments within 35 days: Intrastate + Interstate UI, UCFE, ........... *95 *95

UCX programs, full + partial/part-total weeks...........................

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

Nonmonetary Determinations Timeliness: Number of days elapsed from date of detection by the SESA of any

nonmonetary issue which had the potential to affect the claimant's past, present or future benefit rights to

date of the determination. Source: ETA 9052 report.

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

Percent of separation determinations within 21 days of detection date: ........... 80 80

Intrastate + Interstate UI, UCFE, UCX...................................

Percent of nonseparation determinations within 14 days of detection date: ........... 80 80

Intrastate + Interstate UI, UCFE, UCX...................................

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

Nonmonetary Determinations Quality: Evaluation results of quarterly samples of nonmonetary determinations

selected from the universe of nonmonetary determinations reported on the ETA 9052 report, as instructed in ET

Handbook No. 301 (revised January 1998). Source: ETA 9056 report.

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

Percent of separation and nonseparation determinations with quality ........... 75 75

scores >80 points: Intrastate + Interstate UI, UCFE, UCX................

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

Lower Authority Appeals Timeliness: Number of days elapsed from the date the request for a lower authority

appeals hearing is filed to date of the decision. Source: ETA 9054 report.

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

Percent of lower authority appeals decided within 30 days of filing: 60 *60 *60

Intrastate + Interstate UI, UCFE, UCX...................................

Percent of lower authority appeals decided within 45 days of filing: 80 *85 *85

Intrastate + Interstate UI, UCFE, UCX...................................

Percent of lower authority appeals decided within 90 days of filing: ........... *95 *95

Intrastate + Interstate UI, UCFE, UCX...................................

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

Higher Authority Appeals Timeliness: Number of days elapsed from the date a higher authority appeal is filed to

date of the decision. Source: ETA 9054 report.

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

Percent of higher authority appeals decided within 45 days of filing: 50 50 50

Intrastate + Interstate UI, UCFE, UCX...................................

Percent of Higher authority appeals decided within 75 days of filing: 80 80 80

Intrastate + Interstate UI, UCFE, UCX...................................

Percent of higher authority appeals decided within 150 days of filing: 95 95 95

Intrastate + Interstate UI, UCFE, UCX...................................

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

Lower Authority Appeals Quality: Evaluation results of quarterly samples of lower authority benefit appeals

hearings selected and evaluated as instructed in ET Handbook No. 382 (2nd Edition). Source: ETA 9057 report.

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

Percent of lower authority appeals with quality scores equal to at least 80 80 80

85% of the potential points: Intrastate + Interstate UI, UCFE, UCX......

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

New Employer Status Determinations Timeliness: Number of days elapsed from last day of the quarter (Quarter

Ending Date--QED) in which liability occurred to date of determination (date that the status information was

officially entered into the State's system). Source: ETA 581 report.

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

Percent of status determinations for newly established employers made 60 60 60

within 90 days of the QED...............................................

Percent of status determinations for newly established employers made 80 80 80

within 180 days of the QED..............................................

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

New Employer Status Determinations Accuracy: Accuracy of status determinations based on the application of a

review instrument for an annual acceptance sample selected from a universe of all status determinations for new

and reactivated employers made during one complete calendar year, as instructed in ET Handbook No. 407 (revised

December 1998). This measure includes only the accuracy of the determination, not the posting.

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

Pass new employer status determinations accuracy acceptance sample: No ........... Pass Pass

more than 6 failed cases in a sample of 60..............................

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

[[Page 38097]]

Timeliness of Transfer from Clearing Account to Unemployment Trust Fund (UTF):

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

Average number of days funds are on deposit in the State clearing account <=2 ........... ...........

before transfer to the State account in the UTF, estimated from total days

deposits to the clearing account and total daily ledger balance reported

on the ETA 8414 report..................................................

Ratio of average daily loanable balance in clearing account to average ........... <=1.75 <=1.0

daily transfer to UTF: Ratio of the monthly average daily loanable

balance (line 10, ETA 8414 report) to the average daily transfer to the

Trust Fund (line 3, ETA 8405 report, divided by the number of days in

the month)..............................................................

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

Timeliness of Deposit to the Clearing Account: Elapsed time from the State's receipt of employer contributions

to their deposit in the clearing account, estimated from a random sample of contributions received by the State

during a specified time interval.

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

Criterion deferred until uniform measurement methodology is developed.... ........... ........... ...........

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

*The criteria proposed for First Payment Timeliness and Lower Authority Appeals Timeliness will not be effective

unless and until the final UI PERFORMS regulation replaces the existing criteria for compliance in 20 CFR

640.5 and 20 CFR 650.4(b).

5. Periodic Review and Affirmation or Revision. The Department

of Labor is committed to reviewing performance measures and criteria

periodically, as agreed to by the PEWG and affirmed by the PEG.

Final determination of the criteria for the two current Secretary's

Standards--first payment timeliness and lower authority appeals

timeliness--will occur in conjunction with proposed UI PERFORMS

rulemaking. The first periodic review of the full set of Tier I

measures will occur not more than five years from the date of

issuance, with the exception of the criteria for nonmonetary

determinations timeliness, nonmonetary determinations quality, and

new employer status determinations accuracy, which will be reviewed

after two years. The reviews will include all State performance data

for these measures available at the time of the review.

6. Action Required. SESA Administrators are requested to provide

this information to appropriate staff.

7. Inquiries. Please refer inquiries to the appropriate Regional

Office.

8. Attachment. UI PERFORMS Tier II measures.

Attachment

UI PERFORMS Tier II Measures

Benefits Payment Timeliness Measures

1. Intrastate UI First Payments Timeliness*

2. Interstate UI First Payments Timeliness*

3. UI First Payments Timeliness (Partials/Part Totals)

4. UCFE First Payments Timeliness

5. UCX First Payments Timeliness

6. Continued Weeks Payments Timeliness*

7. Continued Weeks Payments Timeliness (Partials/Part Totals)

8. Workshare First Payments Timeliness

9. Workshare Continued Weeks Payment Timeliness

*Includes Total and Partials/Part-Total payments.

Nonmonetary Determinations Timeliness Measures

10. Intrastate Separation Determinations Timeliness

11. Intrastate Nonseparation Determinations Timeliness

12. Interstate Separation Determinations Timeliness

13. Interstate Nonseparation Determinations Timeliness

14. Nonmonetary Issue Detection Timeliness

15. Nonmonetary Determinations Implementation Timeliness

Appeals Timeliness Measures

16. Implementation of Appeals Decision Timeliness

17. Employer Tax Appeal Timeliness [to be developed]

18. Lower Authority Appeals, Case Aging

19. Higher Authority Appeals, Case Aging

Combined Wage Claims Timeliness Measures

20. Combined Wage Claim Wage Transfer Timeliness

21. Combined Wage Claim Billing Timeliness

22. Combined Wage Claim Reimbursements Timeliness

Tax Timeliness Measures

23. Contributory Employer Report Filing Timeliness

24. Reimbursing Employer Report Filing Timeliness

25. Securing Delinquent Contributory Reports Timeliness

26. Securing Delinquent Reimbursing Reports Timeliness

27. Resolving Delinquent Contributory Reports Timeliness

28. Resolving Delinquent Reimbursing Reports Timeliness

29. Contributory Employer Payments Timeliness

30. Reimbursing Employer Payments Timeliness

31. Successor Status Determination Timeliness (within 90 days of

Quarter End Date)

32. Successor Status Determination Timeliness (within 180 days of

Quarter End Date)

Appeals Quality Measures

33. Lower Authority Appeals Due Process Quality

34. Higher Authority Appeals Quality--[to be developed]

Tax Quality Measures

35. Employer Tax Appeals Quality--[to be developed]

36. Delinquent Reports Resolution Quality

37. Collection Actions Quality

38. Turnover of Contributory Receivables to Tax Due

39. Turnover of Reimbursing Receivables to Tax Due

40. Writeoff of Contributory Receivables to Tax Due

41. Writeoff of Reimbursing Receivables to Tax Due

42. Contributory Accounts Receivable as a Proportion of Tax Due

43. Reimbursing Accounts Receivable as a Proportion of Tax Due

44. Field Audits Quality

45. Field Audit Penetration, Employers

46. Field Audit Penetration, Wages

47. Percent Change as a Result of Field Audit

Benefits Accuracy Measures

48. Paid Claim Accuracy

49. Denied Claim Accuracy [under development]

Tax Accuracy Measures

50. Posting New Determinations Accuracy

51. Successor Determinations Accuracy

52. Posting Successor Determinations Accuracy

53. Inactivating Employer Accounts Accuracy

54. Posting Inactivations Accuracy

55. Employer Reports Processing Accuracy

56. Contributory Employer Debits/Billings Accuracy

57. Reimbursing Employer Debits/Billings Accuracy

58. Employer Credits/Refunds Accuracy

59. Benefit Charging Accuracy

60. Experience Rating Accuracy

Benefit Payment Control Measures

61. Benefit Payment Control, Establishment Effectiveness [under

development]

62. Benefit Payment Control, Collection Effectiveness [under

development]

[FR Doc. 99-17895 Filed 7-13-99; 8:45 am]

BILLING CODE 4520-30-P